It is expected the rupee would continue to gain this week, owing to the positive sentiment in the market. Last week, new Reserve Bank of India (RBI) Governor Raghuram Rajan had announced a host of measures to attract foreign inflows into the country.
On Friday, the rupee ended at 65.25. During the week, it rose by 46 paise, or 0.7 per cent. Last month, it had touched an all-time low of 68.85 during intra-day trade.
Last week, RBI sold dollars through state-run banks, and this helped the rupee appreciate. Currency dealers expect a few more measures by the central bank this week to add to the positive sentiment.
"The rupee is expected to trade at 64-66 against the dollar this week; the bias is more towards strengthening, as a positive sentiment prevails. The next trigger for the rupee would be the outcome of the FOMC (the Federal Open Market Committee in the US) meeting (scheduled later this month)," said S Srinivasaraghavan, head of treasury at Dhanlaxmi Bank.
Many currency experts said a slightly hawkish tone by the US Federal Reserve could impact the rupee. They added anticipating such a scenario, RBI was taking many steps to attract capital flows.