Oil prices are trading below $60 per barrel - a big positive for the rupee and bond markets. MS Gopikrishnan - head of foreign exchange, rates and credit for South Asia at Standard Chartered - spoke to CNBC-TV18 about how easing crude oil prices will support rupee going ahead.

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“The momentum seems to be favouring INR. So on Friday, we broke the 100 day moving average (DMA) at 71 per dollar and obviously there has been a stream of good news which has been initiating especially from the oil front. That is the chance that we breach 70 per dollar however there are a few risks which we need to be aware of. One is that the G20 meeting which is going to happen this Friday and over the weekend and later on the elections itself. So there is an opportunity for the rupee to appreciate and break 70 per dollar,” said Gopikrishnan.

Talking about whether the RBI will continue to do OMOs, he said, “Bonds have been supported mainly from open market operations (OMOs) and from small positive flows have started coming in the bond market. So that is one of the reasons, bond yields are softening. The Reserve Bank of India (RBI) has not announced a follow-up of OMO yet, so there will be concerns around that but I personally think that RBI will continue to do OMOs. It will trade in the range of 7.55 to 7.75. So we are within that range today. I don’t think it will break this range substantially."

“Rupee, in my view, has appreciated by and large at maximum. I see some negatives coming through. At the end of the day, it is demand and supply so if the flows don’t continue then we would probably end up against rupee and pressure but the momentum is in favour of the rupee so we can probably see it breach 70 per dollar now,” said Gopikrishnan.

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