The RBI set the reference rate for USD/INR at 74.62 levels

Abhishek Goenka IFA Global

The USDINR pair made a flat opening at 74.54 levels and traded in the range of 74.51-74.66 with a sideways bias. The pair finally closed the day at 74.56 levels. The rupee remained weak against the US dollar because public sector banks bought the US unit persistently, likely on behalf of the RBI. The central bank is said to have consistently intervened in the spot market for the last few days to prevent the rupee from appreciating beyond the psychological level of 74.00 a dollar.

Some banks were said to have placed their bets in favor of the dollar after they noted a firm US unit globally. This dragged the rupee down to 74.66 a dollar. The premium on dollar/rupee forwards contracts was slightly higher today because some state-owned banks purchased forward dollars, likely on behalf of the RBI. Bank of Japan kept interest rate targets unchanged. BoJ also cut the current fiscal year's growth forecast as new emergency curbs to combat the pandemic hurt consumption, reinforcing expectations that it will lag global counterparts in dialing back its massive stimulus.

The BOJ sharply revised up its consumer inflation forecast for the current fiscal year to 0.6% from 0.1% due in large part due to recent rises in energy costs and commodities prices. Eurozone CPI was finalized at 1.9% YoY in June, down from May’s 2.0% you. The RBI set the reference rate for USDINR at 74.62 levels. India's Foreign exchange reserves stood at USD 611.90 billion, up by USD 1.88 billion on the week ended on 9th July.

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Abhishek Goenka

IFA Global

Mr. Abhishek Goenka is the Founder and CEO of IFA Global. He pilots the IFA Global strategic direction with a focus on relentlessly improving the existing offerings while constantly searching for the next generation of business excellence.

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