11/14/2023 0 Comments Dollar to inrWith crude oil prices also likely to witness a floor near $70 levels in the short term, a deteriorating Russian situation where more sanctions on the Russian economy this year could create supply tightness globally and keep oil prices elevated, there will be depreciation bias in the rupee this year.įinally, the rupee might also be under pressure if short-term yields remain elevated in the first half of the year where we might see the rupee depreciating to near 85 levels by the end of the third quarter.Īnuj Choudhary, Research Analyst, Sharekhan by BNP Paribas The dollar index could stay elevated in the short term it may lead to a fall in expectations of a Fed pivot in 2023 keeping the rupee on the higher side in coming quarters. The US Fed funds rate currently at around 4.75 percent has more room left as current indications are for another 75 bps rate hike during the year which could narrow the interest rate differentials between the two countries and further lead to outflow concerns from domestic markets weighing on rupee sentiment. In 2022, rupee fell during all the months, except for November with broader dollar strength, narrowing yield differentials & widening balance of payments (BoP) deficit as the major reasons. Naveen Mathur, Director - Commodities and Currencies, Anand Rathi Shares and Stock Brokers The expected rise in crude oil prices and worries of further rate hikes by the US Feds to tame inflation could further deteriorate the case of the Indian rupee. This could result in the prices of equity shares moving down which could negatively hit Indian investors. This means that we could witness huge outflows from the rupee-denominated assets. If the USDINR Spot breaks these levels, we may even witness the currency touching the 86 mark by the end of Dec’23.Īccording to the World Bank, the year 2023 is likely to witness a massive global recession, which will also adversely impact the Indian economy. In the mid-year of 2023, we may see the local unit brushing pass off 84.20-84.70 levels. The USDINR Spot is likely to break the crucial 83-mark that the RBI has been actively defending for the past few days. ![]() With respect to the coming quarters of FY 2023-24, we expect the overall trend of the USDINR Spot to remain bullish. Heena Naik, Research Analyst - Currency, Angel One Looking at the known factors, we believe Spot USDINR to consolidate between 81.50 to 84.50 in the coming fiscal year. The RBI may intervene on both sides for a stable currency and the adequacy of reserves. Foreign investors are likely to remain cautious amid geopolitical worries, slower global growth and risk-averse sentiment.īetter import covers, comfortable forex reserves, stable international commodity prices, FDI inflows and shifts in monetary policy are some of the triggers that make the rupee resilient among the regional currencies. The sticky global inflation will make the rate market “higher for longer” which in turn keeps the dollar biding stronger. However, a smaller CAD and favourable growth differential will lend some support to the rupee.ĭilip Parmar, Research Analyst, HDFC Securities We may also see the rupee inching closer to the 84 per dollar mark, towards the end of FY24. On a quarterly basis, we see USD/INR inching towards 82.5 per dollar in Q1, and 83 per dollar in Q2 as the Fed rate hikes are materialised. ![]() Apart from this, FPI flows and oil prices will also be important for the exchange rate going forward. Just like in 2022, perhaps the most important driver of the USD/INR rate this year will be the trajectory of the dollar.Īmongst domestic factors, India’s current account deficit will be the key factor impacting USD/INR. The trajectory of USD/INR in the next year will be determined by both global as well as domestic macro fundamentals. We collated the views of analysts on the trajectory of the rupee. ![]() Analysts and brokerage firms expect the domestic currency to remain volatile at least for the year. Fed policy and crude oil prices are the two most important factors for the rupee.
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