USD/INR likely to fluctuate at around 64 for now – ScotiaBank
Source: FxWire Pro - Commentary / 27 Dec 2017 08:01:54 America/New_York
The Indian rupee has been resilient with a month-to-date rise of 0.6 percent in spite of equity outflows, which could be partially due to a flat DXY Index, noted Scotiabank in a research report. In the meantime, rising INR ND OIS rates and government bond yields show deepening concern over inflationary pressure and future debt supply. India’s headline inflation might accelerate further in December after accelerating to 4.88 percent year-on-year in November, stated Scotiabank.
The Reserve Bank of Indian had kept its policy rate and CRR on hold at 6 percent and 4 percent, respectively in December with a neutral stance to strike a balance between strengthening the nation’s economic growth and securing the retail inflation target of 4 percent, plus or minus 2 percent on a durable basis. The Indian Ministry of Finance is expected to issue the first tranche of INR 1.35 trillion recapitalization bonds to public sector banks in early January.
“USD/INR is expected to fluctuate at around 64 for now, while following a broader market tone”, added Scotiabank.
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