Ongoing capital inflows may prevent fall in rupee: Angel

Angel Broking's report on currency

Dollar/INR
The Rupee witnessed a volatile movement on Wednesday as it opened on appreciative note but weakened during mid-trade on the back of large dollar demand from a private petrochemical company and state-run banks to meet the payment for defense expenditure. The Indian Rupee touched an intra-day low of 61.71 and closed at 61.62 on Wednesday, marking an intraday depreciation of 0.2 percent. For the month of October 2013, FII inflows totaled at Rs.10471.80 crores ($1702.18 million) as on 23rd October 2013. Year to date basis, net capital inflows stood at Rs.83699.30 crores ($15347.70 million) till 23rd October 2013.

Outlook: The Rupee is expected to depreciate in today’s trade as dollar demand coupled with mixed market sentiments will act as a negative factor for the currency. In the later part of the trade, a reversal could be seen if domestic equities react positively to the positive Chinese data. Also, ongoing capital inflows will prevent sharp depreciation in the currency.

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