INR opens at 68.57 and now our preferred view is that INR could about one rupee weaken from here, given that it is quite overvalued. We also have to remember that historically INR has been an overvalued currency and given that USD looks weaker, any significant weakness in INR is ruled out.
Budget announcement of starting external borrowing could be fraught with risks. If govt goes overboard, it could create significant currency volatility and even hamper country credit rating ( example Argentina and Brazil who have 30-40% of GDP as external borrowing). As of now we believe that govt knows the risks and may act prudent and go very slow on it.
Today Asian currencies are mildly weaker and on Fri, US posted healthy jobs data. Crude is stable around 64 levels. We suggest to cover very near term imports.