Strong showing of BJP and therefore policy continuity leads to a stronger opening at 69.40 as against Fri close of 70.22 and may trade in a wide range of 69.20 to 69.80. Expect RBI intervention around 69-69.20 and not let rupee gains drastically before actual results. If on May 23rd, BJP does get a majority to form govt, we may once see Rupee at 67.5 as well and RBI intervention could be strong to let no further gains.
In bond markets also, we foresee softening of yields and We expect a resumption of bond inflows after Govt presents budget in July. Money coming in bond markets would ease local tight liquidity and would help the entire pack of NBFCs.
From a Global perspective, INR may not gain much. Crude is above 73.2; Trump is getting aggressive against Iran and CNY is threatening to reach psychological imp level of 7.0 ( now 6.89)
Suggest using options to hedge any import or export till election results. Any import payment over the next two days could be paid at current levels of 69.40-69.50. Any level around 67.50-68 in coming days should be used to cover the import of the next few months.