Rupee opens marginally lower at 90.52 as traders eye RBI policy meet

The local currency is currently trading at 90.4600, as compared to 90.4400 in the previous session

The Indian rupee opened slighter lower at 90.5200 on February 5 as traders stayed on the sidelines ahead of the Reserve Bank of India’s (RBI) monetary policy meeting, while having recovered from its record lows that it had hit in the previous sessions, sparked by the US-India trade deal.

The local currency is currently trading at 90.4600, as compared to 90.4400 in the previous session. The rupee’s rally was stalled on Wednesday, after importers and the central bank were seen buying the greenback, as the rupee levels were considered attractive near the psychological 90 level, and with the RBI looking to rein in any appreciation beyond Rs 90.

“The rupee seems to be in a range bound mode with foreign portfolio investors (FPIs) not buying dollars now. Instead, for a change, the RBI is buying the dollars which will enable them to bring their short (positions) down and also give the necessary liquidity to the market,” analysts from Finrex Treasury Advisors said in a research note.

The RBI had conducted a three-year dollar/rupee buy-sell swap auction on Wednesday, where nearly $25 billion was deployed as against the notified $10 billion, drawing strong bids.

Traders will now look forward to the monetary policy committee (MPC) meeting on Friday, where the central bank is expected to keep rates steady, and maintain its ‘neutral’ stance, while focus will remain on liquidity measures from the RBI.

Market participants expect the RBI to address the liquidity concerns considering the higher rates on the short-term and long-term money market instruments.