Indian Rupee (INR) Advances Against US Dollar on Trade Optimism - Societe Generale

94.14-96.95 is USD/INR’s six-month trading range. Societe Generale strategists say the pair is edging towards its lower end, supported by recent currency measures from the Reserve Bank of India (RBI). They point to speculative INR purchases amid hopes of a possible US-India trade agreement, strong overseas interest in the Reliance Jio IPO and the RBI’s inflation concerns. However, they caution that oil prices, capital flows and the direction of the US Dollar (USD) will determine whether the rally lasts.

RBI Measures Help Stabilise Rupee

"USD/INR is quietly gravitating toward the lower end of its six-month 94.14-96.95 range, supported by a series of FX-supportive measures unveiled by the RBI in recent weeks."

"The latest round of INR buying may be speculative on optimism surrounding a potential US-India trade agreement."

"Solid foreign participation in the ongoing $3.2bn Reliance Jio IPO may also be helping."

"The RBI minutes published yesterday confirmed growing concern over the inflation outlook."

"While RBI actions are helping stabilise the currency for now, the durability of the rally will ultimately depend on oil prices, portfolio flows and the broader direction of the dollar."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)