Rupee remained rangebound during the week

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Forex
Mumbai, Feb 2: After range-bound trading sessions, Rupee strengthened slightly against the US Dollar to close at 39.35/36 per dollar in the week ended February 1.

The partially convertible Indian currency traded in a close range difference of 5-6 paise against the greenback in a fairly active inter-bank foreign exchange (Forex) market. Moreover, local unit remained stuck between 39.35 and 39.40 per dollar throughout the week, dealers said.

The week was eventful as the Reserve Bank of India (RBI), maintained status quo by keeping all the key rates unchanged in its third quarterly review of monetary policy on Friday. However, the marketmen expected atleast 25 basis points rise for the short-term loans following a surprise 75 basis point cut by the US Federal Reserve in the previous week.

Further, it is reported that US Fed is likely to go for another atleast 50 basis point cut in rates aimed to stimulate the economy heading towards recession.

However, the marketmen expect that there is less possibility of much inflow diversion in the week ahead, consequently the local unit is likely to witness a range-bound trading as the central bank's suspected intervention would cap its appreciation against dollar.

''Indian markets didn't witness the diversion of overseas funds inflows after the US Fed move, infact, some foreign institutions were in a mode pulling out their funds from the Asian markets to offset their loss in US,'' said a senior dealer with a leading private bank.

Nevertheless, it would be difficult now to make any asumptions concerning Indian markets as the whole scenario is quite uncertain whether the inflows will be pressed in, he added.

UNI

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