The prices can go much higher if the global economy enters a prolonged recession. It expects the currency pair to average at 80 Rupees by mid-year before rallying further to 86.97 Rupees by the end of the year. Long Forecast’s USD to INR forecast 2025 suggests the start of the year around 79.79 Rupees. If you want to stay updated with the latest decisions of US Fed, you are welcome to join my free Telegram group where I also share my updated analysis on stocks, forex & cryptocurrencies. Even if Fed pauses in the next half of the year, it can still keep the rates high for a long duration if inflation remains high. Analysts expect the interest rates to remain high throughout 2023. It will be very difficult for USD to INR to show strength this year amid high inflation in the United States. Therefore, I expect US Fed to remain hawkish in 2023 to control inflations. Global equities have also been in an uptrend since the start of the year, along with strong economic data. Analysts are now expecting inflation to remain sticky in the near future. The January CPI data has shown a decrease in inflation but came out below expectations. The move can increase the demand for INR and decrease the selling pressure. More recently, the Reserve Bank of India has given the go-ahead to the banks of 18 nations to trade in Indian Rupee. As a result, Indian Rupee has also appeared as a viable option for many countries. What to Expect from RBIĭue to the current geopolitical scenario, many countries are now exploring more options for international trade. This put the interest at 6.5%, which is likely to slow the economy even more in the coming months. On February 8, RBI announced another rate hike of 25 basis points. However, the oil imports and the slowing Indian economy is still weakening the Rupee. RBI is increasing interest rates to strengthen the Indian Rupee. This is the primary reason behind the ongoing rally in USD/INR. The index is once again trading close to 102 points which shows that the dollar is gaining strength compared to other currencies. Indian Rupee Rises Amid A Strong Bounce In DXY IndexĪfter a major correction in July 2023, the DXY index has rebounded strongly. Therefore, Dollar to Indian Rupee exchange rate will most likely remain stable. In the coming months, it is unlikely that the Rupee will show any significant weakness against the US dollar. Nevertheless, the Indian economy currently seems to be in a Goldilocks fueled by strong exports and healthy forex reserves. As long as the dollar strength index keeps rising, any pullback in USD to INR is less likely. A bounce in the DXY index is also acting as a tailwind for USD/INR. The rising oil prices due to recent OPEC+ production cuts generated some headwinds for the Indian Rupee. This has led to a weakness in Indian Rupee.Ĭrude oil is one of the largest imports of India. However, in its April 2023 meeting, RBI surprised investors by pausing the rate hikes. The increase in interest rates by RBI gave the Indian Rupee much-needed strength in terms of the US dollar. Since the start of the year, the US Federal Reserve and the Reserve Bank of India (RBI) have both remained hawkish. Since then, it has been consolidating in a narrow range with very little volatility. In October 2022, the pair surged to a new all-time high of $0.8328. Before attaining its all-time highs, the USD/INR tasted the 76.45 price mark in March 2020, just as the coronavirus pandemic was sweeping through the world.Īs the US Federal Reserve started to hike rates, Indian Rupee started to slide against the US Dollar. The pair surged to an all-time high of 77.887 rupees in 2022. After retracing to 39.9 rupees in November 2007, the USD/INR has been on an uptrend since then.
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