Below is the Quote on Rupee by Mr. Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services
"The RBI policy was a credit push policy, something that rejoiced the bond market. The decision of holding a status quo as inflation is high and maintaining the accommodative stance was in line with expectations. Governor Das asked to 'look through inflation' and the central bank expects inflation to ease substantially, so we cannot rule out another rate cut this FY21 to combat the coronavirus led contraction in growth. The policy outcome had a knee-jerk reaction on USDINR spot and dropped close to the strand support zone of 73. With the optimism over US fiscal stimulus deal, we expect a corrective leg towards 72.75 zone in USDINR spot. However, the downside is limited as we get close to the US elections. So for next week, we expect USDINR spot to trade within 72.75-73.50 levels."
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