The rupee is likely to trade in a range of 47.62-77 against the greenback this week. The Union Budget has already given a direction on the interest rate movement.
The market will, however, continue to watch the situation in Iraq and the statements coming in from the United States and its allies as well as the United Nations.
This is one factor which could influence the movement of the rupee. The Indian unit had closed at 47.6750/68 on Friday after touching a low of 47.6675. Dealers feel that even as the rupee is appreciating, there is still upside to it.
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In the immediate future up to the year ending March 2003, the rupee can touch 47.50 against the dollar provided there is no dramatic change on the Iraq front. The rupee had appreciated 10 paise in the last 15 days.
The central government had last week prepaid $3 billion worth of foreign currency loans. The government is likely to continue to prepay the high cost foreign debt.
Dealers expect the Reserve Bank of India to start aggressively mopping up more from the market to enable the government prepay foreign debt. The accretion of forex reserves for the week ended February 21 was only at $71 million