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Below is the quote on Rupee 28 January 2022 By Ms. Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking Ltd

The Fed was slightly tilted on the hawkish side and markets were spooked on prospects of more-than-expected interest rate increases that boosted the dollar index. Inflation outlook in the U.S. has worsened amid supply-side bottlenecks, while the recently released strong GDP data for 2021 has underpinned the Fed’s hawkish stance. Markets are also considering prospects of five rate hikes in 2022 and also speculate a more-than- 25 bps rate increase in March. A strong dollar, geopolitical tensions between Russia-Ukraine, the relentless rise in crude oil prices are going to be headwinds for the rupee over the long-term. However, in the near-term, we do see an appreciation bias setting in for the rupee. This belief largely stems from the fact that outflows may soon reverse course following the federal budget and the government’s improving fiscal math will also be eventually factored in. We see the rupee in a 74.50 to 75.80 band over the short-term.

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