INR opens at 70.84 and would continue to trade in small range of 20 to 30 paise. This week BajajFinance QIP opens and we expect large FII interest in it and this should lead to some INR gains.
In a major overnight development, India refused to sign RCEP deal and we support India’s decision on it.The main concerns of India were flooding of milk and milk products from New Zealand and Australia; threat of giving India’s e-commerce data to other countries and dumping of cheap Chinese Products in the Indian market. At the same time, few sectors like pharmaceutical, cotton yarn and to some extent services may witness a setback. Overall India’s concerns should have been addressed before it becomes part of RCEP.
In the global markets, USD saw mild gains and equity markets was strong. Crude oil also rose a little and this morning most Asian equities are trading with strength.
We suggest to hedge near term imports around 70.30-70.50 and long term exports could be hedged around 70.80-71.10.