Forex market: RBI intervention may halt rupee rally against dollar

On account of the Indian rupee touching the Rs 69/dollar levels, the Indian Reserve Bank of India may chip in and buy dollars that it had to shed from its reserves to keep the Indian National Rupee (INR) below Rs 72/dollar in recent times. The Forex market experts are of the opinion that after the weak US job data and Fed chief's dovish stance on the interest rate change, the dollar is expected to slip further and rupee may touch the 69/dollar levels in few weeks time. However, they said that to take advantage of this lowering of dollar, RBI may get lured to buy back the dollars it had to shed recently during the lowering prices of rupee against the US dollar.

Elaborating on the matter Anindya Banerjee, Analyst at Kotak Securities told Zee Business online, "Weak non-farm US data has led to further slide into the US dollar and the rupee may soon touch the Rs 69.5/dollar levels and as the Fed chief is unlikely to announce any change in interest rates in his speech on Monday and Tuesday, hence due to the uncertainties into the global markets, the rupee may further gain its lost ground and show 69 levels by the end of March." He said that such a situation would be a tricky one into the Forex trade as the Reserve Bank of India may get a temptation to buy the dollar it had to shed in the wake of weak rupee recently to keep it below 72/dollar levels. If the RBI does that in that case the rupee may see some profit booking.

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एग्री कमोडिटीज में तेजी पर क्या करें? जानने के लिए देखिए हमारा खास शो 'एग्री में हरियाली, खरीदारी या बिकवाली' https://t.co/K92hmPV2GJ

— Zee Business (@ZeeBusiness) March 11, 2019

Giving his view on the reason for dollar going weak Anuj Gupta, Deputy Vice President — Commodities and Forex at Angel Broking said, "On account of uncertainties into the international markets and US job data further hitting the dollar against major currencies at the dollar index, the bull run in rupee trade is expected to continue." He said that much will depend on the Lok Sabha poll results as much of the investment scene depends upon the Lok Sabha poll results.​