Indian stock, bond and currency markets are closed on Friday for a local holiday. Trading resumes on Monday. Analysts at Goldman Sachs said pressures on the Indian rupee to gain would increase after the central bank unexpectedly raised the cash reserve ratio (CRR) on Thursday to curb inflation.
"We expect the CRR hike will increase pressures on the rupee to appreciate as rupee liquidity will tighten," Tushar Poddar and Pranjul Bhandari said in a note."In particular, we continue to expect a repo rate hike in its policy meeting on April 29," they said.
The analysts said they expected a 4 percent rise of the rupee versus dollar in the fiscal year 2008/09. The rupee has moved between 39.89 and 40.01 in the past week amid signs of central bank intervention to cap its strength. The rupee is among Asia's worst performers so far this year with a loss of about 1.3 percent versus the dollar.
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