Commerzbank - The USD/INR is rising, with the RBI unable to arrest the rupee's decline

On Monday, the Indian rupee fell below the latest record low of just under 77.50 points against the strong US dollar. Commerzbank economists predict that the USD/INR pair seems to have another leg higher.

May 10, 2022 - 03:53 PM 256 views

8.	Commerzbank - The USD/INR is rising, with the RBI unable to arrest the rupee's decline

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© 8. Commerzbank - The USD/INR is rising, with the RBI unable to arrest the rupee's decline

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On Monday, the Indian rupee fell below the latest record low of just under 77.50 points against the strong US dollar. Commerzbank economists predict that the USD/INR pair seems to have another leg higher.

RBI to Address INR Weakness

The all-time low for the INR currency spotlights its weaknesses amid the boost in financial market volatility. That includes: 1.) India’s dual defect situation by way of the financial and current account deficits 2.) With more reliance on oil imports, this is also the most pressing issue for the majority of Asia.3.) Rising inflationary pressures, specifically in food prices.

The USD/INR currency pair is still experiencing extreme intolerance. Therefore, we predict RBI’s intervention might alleviate INR’s fall, but it won’t offset it completely.

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