Domestic currency rupee opened on flattish note after it depreciated on Tuesday after tensions mounted between India and Pakistan following the airstrike on terror camps in Pakistan-occupied Kashmir.  Political growths are expected to have a strong effect on rupee and bond markets, in the short-term.

Sovereign bond trades will take signals from the RBI announcement on open market debt purchases for the month of March. The RBI stated in a notification on Tuesday that it has decided to buy bonds under open market operations for an aggregate Rs25,000-crore during the first two-weeks of March, through two auctions of Rs12,500 crore each. Moreover, the central bank will consider further liquidity operations and the choice of instruments.

Post news of Pakistani jets violating Indian air space, the Indian rupee gave up its gains. However, during mid noon hours, Rupee trades 40 ps lower at 71.47 per US dollar

On the other hand, crude oil recovered following a surprise draw in crude oil inventory of 4.2 mn barrels for the week ending 22-February. On Wednesday, The Rupee v/s Dollar pair is expected to quote in the range of 71.05 and 71.70.