USD/INR Price News: Indian rupee benefits from RBI’s favor to mutual funds

In addition to the Asian session risk-on, USD/INR bears the burden of the RBI’s latest favor for the mutual fund industry while declining to 76.34, down 0.09% on a day, amid the early Monday.

During the early Indian session, the Reserve Bank of India (RBI) announced a Special Liquidity Facility (SLF) for Mutual Funds worth Rs 50,000 crore, close to $6.6 billion to help the ailing industry.

The reason for such a move could be cited from the Reuters report saying, “Fund houses in India were battling to reassure investors on Friday, amid fears of a flood of redemption requests after the unprecedented closure of six debt funds by global giant Franklin Templeton.”

The news also mentions that the government announced a spending package of 1.7 trillion rupees ($22.29 billion) in March and told Reuters on Friday it was offering food and cash for essentials to poor and marginalized people and had set up relief camps in various parts of the country.

It’s worth mentioning that the coronavirus (COVID-19) outbreak in India is considered in its nascent stage due to the more than one-month lockdowns that are likely to stay beyond the second deadline of May 03.  “The country has reported 26,496 cases of COVID-19, the disease it causes, and 824 deaths,” said Reuters.

It should also be noted that the BOJ’s easing and an absence of risk-negative news from the US seem to help the markets during the Asian session on Monday. In doing so, the traders also paid a little heed to China’s downbeat Industrial Profits data for March, -34.9% versus +5.4% prior.

As a result, the US 10-year Treasury yields rise over three basis points (bps) to 0.627% while equity benchmarks in India register gains over 2.0% by the press time.

Moving on, traders may have to witness a dull day amid a lack of major data/events. Though, a surprise virus update still can offer an active session ahead of a crucial week.

Technical analysis

Unless bouncing back beyond six-week-old support-turned-resistance, currently near 76.73, buyers are less likely to aim for 77.00, which in turn keeps the monthly low surrounding 75.35 on the sellers’ radar.