INR opens stronger at 68.89 as against Friday’s close of 69.02. Today it may range between 68.80 to 69.15. India’s CAD for Q4 shrank to USD 4 .6 billion as against USD 13 billion in the same quarter last year. This compression is likely to support the rupee.
Surplus USD with MNC banks (after LEF guidelines) is also playing a role in keeping INR strong. This is also resulting in spike up forward premiums.
The major overnight development was restart of US and China trade talks . This lead to gains in the equities market. Crude rose by almost 2% ahead of the OPEC meeting which is starting today.
Suggest to use levels around 68.85 to cover very near import payments. Export hedging could wait.