"Our Europe economists think this will make Grexit that much more difficult to avoid. Although India's exposure to Greece is negligible, in our view, contagion, if any, could travel through markets.
"We would expect FPI equity inflows (USD 0.3 billion in FY16 so far) to stall further as markets swing to risk off, although India's growth prospects and China's volatility should limit outflows," BofA Merrill Lynch Research said.
"We believe that the RBI would sell USD 15 billion to defend Rs 65/USD levels to anchor INR expectations in the FX markets. Not surprisingly, Governor Rajan... Reiterated that the INR is at fair value," it said.
The rupee's performance in the current Greek crisis has been broadly in line with peers.
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RBI could let initial shock blow over, it added.
"USD 15 billion leaves 8 months' import cover on March 2016 basis... We continue to peg this at about USD 15 billion assuming that the RBI must maintain 8-month import cover for rupee stability," it added.
"We expect the RBI to hike the FPI G-sec limit by about USD 5 billion if Greece resolves itself next week," it further said.
On open market operations, it expects no such activity until December.
The RBI will likely prefer to inject liquidity through repos rather than OMO purchases for now in case of capital outflows.
"We estimate that the money market liquidity will likely persist at sub-Rs 500 billion," the report added.