The RBI Revese Repo move

In an effort to stop the rupee from appreciating, the RBI has come out with its first ever Reverse Repo auction of 15000 Crs with a green-shoe option of additional 10000 Crs

The euphoric state the markets are witnessing post the election results, saw the Rupee appreciate to 58 levels to the Dollar, causing the RBI to intervene. The RBI, in March alone, bought a net $7.8 Billion of dollars from the market according to the latest data. There is reportedly more buying which they did in the months of April & May to stem the rupee appreciation. The data however is yet to be released.

This recent step is also to serve the purpose of beefing up government fund requirements, as the new government starts its spending operations soon.

The USDINR pair is expected to trade between the 58-62 levels for the next 3 months.