Indian Rupee: RBI inflows and reduced tail risks – MUFG
MUFG’s Michael Wan notes strong Indian Rupee (INR) outperformance driven by larger-than-expected US Dollar (USD) inflows from Reserve Bank of India's (RBI) FCNR(B) measures, which now exceed US$130bn.
The Indian Rupee (INR) has been outperforming significantly, driven by an influx of US Dollars (USD) into the Reserve Bank of India's (RBI) FCNR(B) measures. As of August 31st, these inflows surpassed an impressive $130 billion. While MUFG's Michael Wan expects the USD/INR exchange rate to continue trending upward over time, he acknowledges that the RBI's monetary policy measures have effectively diminished the risk of a sharp depreciation in the INR.
The bank's analysts believe that these FX interventions have provided the authorities with significant power to counteract potential downturns in the currency's value. MUFG also anticipates a 50 basis points (bps) rate hike from the RBI in December, given robust macroeconomic conditions.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
