Hopes of decline in key lending rates by central bank, along with healthy foreign funds inflow and low crude oil prices, are likely to support Indian rupee during the upcoming week, believe experts.
Market observers hope that Reserve Bank of India (RBI) will cut key lending rates on the back of the union budget's fiscal prudence measures, reduction in small savings interest rates and low inflation.
Decline in key lending rates is expected to support the rupee's value in the upcoming week.
RBI will conduct monetary policy review on April 5.
"Though a 25 basis points (BPS) rate cut is anticipated by market participants, and few even expect a possibility of a surprise 50 BPS cut as well, thereby setting the tone for the new financial year," Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, was quoted as saying in media.
"If it does happen, equity reaction will be very positive and can further affect rupee appreciation."
Sharma predicted the rupee to range from 66.20-65.80 to 66.80-67.10 during the coming week.
"A conclusive break of 66.20 (by close) only can lead the USD/INR pair towards 65.80," Sharma elaborated.
On technical basis the dollar/rupee pair is seen to have a steady support at 66.10-20 and resistance at 66.80-90.
On a weekly basis, rupee raised by 38 paise to 66.24-25 (March 31) against a US dollar from its earlier close of 66.62-63 (March 23).