Indian Rupee: How are trade hopes lifting INR against the US Dollar? - Societe Generale

USD/INR is edging towards the bottom of its six-month 94.14-96.95 range as recent measures by the Reserve Bank of India (RBI) lend support to the currency, according to Societe Generale strategists. They point to speculative INR purchases fuelled by 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 the sustainability of the rally will hinge on oil prices, flows and the direction of the US Dollar (USD).

Can RBI measures keep the rupee steady?

"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. Know more.)