INR opens at 68.56 and it seems to be in very very tight range for some time. As usual, the range for the day could be 68.40 to 68.70.
India’s trade numbers showed an economic slowdown, with both import and export contracting about 9%. Yields on 10 year government of India bonds continued to slide down below 6.5. We firmly believe that over next 12 to 18 months, interest rates could further slide down by 1 to 1.5%. This could also result in softer forward premiums.
FIIs are pulling out money from equity but seems to be bringing money in the debt market and hence there is no major change in the overall FII numbers. We have been saying that over next few months debt market could continue to see a good amount of FII inflow and a recent number seems to be supporting it.