By Rohit Vaid

New Delhi, Apr 3 (IANS): A mega US infrastructure creation programme along with likely retention of key lending rates and an accommodative stance by the Reserve Bank are expected to boost the rupee's prospects during the upcoming week.

Accordingly, US President Joe Biden recently announced a '$2 trillion plus job plan', including $621 billion to rebuild infrastructure.

If passed by the US Congress, the plan will add pressure on the dollar against all the EM currencies including the rupee.

"Another US stimulus may keep equities buoyant and the rupee strong," Sajal Gupta, Head, Forex and Rates at Edelweiss Securities told IANS.

"Expect the rupee to trade between 72.90 to 73.60 during next week."

Last week, the rupee closed at 73.11 per US dollar.

"The last trade week was very volatile for the forex market, especially on speculating trading ahead of Biden's additional stimulus," said Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services.

"Biden announced his long-awaited $2 trillion-plus job plan, including $621 billion to rebuild infrastructure. This new package would certainly be a big positive for the US economy if passed by Congress."

Furthermore, Gupta cited that some profit-booking has led to a fall in dollar gains.

"For next week, we expect USDINR spot to trade in between 72.50-73.50."

Besides, the Reserve Bank's MPC is expected to retain key lending rates and an accommodative stance during the first monetary policy review of 2021-22.

"Next week, market participants will be keeping an eye on the RBI policy statement; expectation is that the central bank could keep rates unchanged and wait for some more time before taking any action to spur growth," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

"The RBI is likely to continue with the accommodative monetary policy stance and wait for an opportune time to announce monetary action with a view to ensure the best possible outcome in terms of pushing growth without sacrificing the main objective of containing inflation."

On the other hand, rising Covid cases will add pressure on the rupee.

Lately, a new wave of Covid-19 infections has hit several states. This comes at a time when India is trying to ramp up the vaccination drive.

"RBI's interventions in currency markets and spread of virus and pace of inoculations and global risk appetite will determine fate of the currency this week," said Devarsh Vakil- Deputy Head of Retail Research at HDFC Securities.

"We expect it to gradually depreciate compared to greenback over the next few weeks."

The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.