Rupee Quote - The Indian rupee has continued to move on the downhill journey By Ms. Sugandha Sachdeva, Religare Broking
Below is quote on Rupee 29 June 2022 By Ms. Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking Ltd
The Indian rupee has continued to move on the downhill journey since the beginning of the year, amid a backdrop of heavy foreign fund outflows from the domestic markets, strength in the safe-haven dollar towards two-decade highs, and firming crude oil prices. The backdrop of heated inflation, prolonged Covid-19 lockdowns in China, the monetary tightening campaign of the key central banks, and supply chain disruptions caused by the Russia-Ukraine war are clouding the outlook for global economic activity and have led to steep depreciation of the rupee against the dollar by around 6.30% YTD.
Even as the rupee holds a depreciation bias in the near term, we envisage that the rupee would manage to reverse some of the losses in the second half of the year. Strong long-term fundamentals, political stability, and a large pile of forex reserves are likely to provide a cushion to the Indian rupee around the crucial 80 mark. While our FX reserves have depleted by around $10bln in June, indicating that the RBI is proactively expending reserves to stem the sharp fall in the domestic currency, we still fare well in terms of import cover and other short-term debt obligations. However, RBI is opting for other measures too such as tightening monetary policy, which may arrest the rupee weakness.
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