RUPEE OVERVIEW

The rupee opened largely unchanged today on the back of optimism about economic recovery across the globe after some states in the US relaxed their lockdown restrictions, which had been imposed to contain the spread of coronavirus.However, simmering trade tensions between the US and China and the expectations that the Reserve Bank of India may curb sharp rise in the rupee are likely to keep market players on tenterhooks.New York City, hardest-hit in the US by the coronavirus outbreak, allowing resumption of construction and manufacturing activities from Monday and expectations of a dovish monetary policy by the US Federal Reserve on Wednesday boosted US share indices in overnight trade.Strength in global share indices is expected to spill over to domestic equities as well, which is likely to support the Indian currency.Currency traders may refrain from placing big bets on the greenback given that the Reserve Bank of India has curtailed rise beyond 75.35-75.40 a dollar last week through its relentless dollar-buying interventions. The RBI's interventions have signalled traders that the central bank may not allow appreciation in rupee above these levels, and may continue to purchase dollars in coming days too. The RBI has added about $12.5 bln to its foreign exchange reserves in May, taking these to a record high of $493.48 bln.However, the rupee may remain supported by the expectations of foreign fund inflows from overseas investors who are looking to invest in Indian companieAbu Dhabi's Mubadala Investment Co plans to invest around $1.2 bln for a 1.85% stake in the company. Media reports said Jio Platforms is set to raise about $775 mln from Abu Dhabi Investment Authority by selling a 1.16% stake, which makes it the seventh investor to help the company raise nearly $13 bln in less than two months.Further, Saudi Arabia's Public Investment Fund is also expected to participate in Jio Platforms' fundraising spree, along with Microsoft.