Indian rupee: India’s rupee seen firming to 78.50-79.50 by fiscal year-end – HDFC Bank

The country’s top private lender said the Indian rupee is likely to strengthen to 78.50-79.50 against the dollar by March 2023, as commodity prices stabilize globally and domestic fundamentals improve.

The rupee has weakened 7.5% so far in the 2022 calendar year, trading near a record low of 80.0650 hit last month, as aggressive rate hikes by the Federal Reserve sent the dollar rally and the commodity down after Russia invaded Ukraine. prices went up.

Leading economist Sakshi Gupta said, “We don’t think this depreciation in the rupee is going to be sustainable. By the end of (this financial year), we really expect some stabilization and we are looking in the range of 78.50 to 79.50 ” HDFC bank.

He said softening commodity prices around the world and strong liquidity, coupled with stronger fundamentals of some emerging markets than developed economies, should drive foreign investors back to India at the end of the fiscal year, as near-term volatility eases. It becomes

Gupta said that India’s current account and rupee will be a net beneficiary even at the current oil price level. Brent crude has fallen 30% since hitting highs in early March, while coal and gold prices have also declined significantly.

Improving India’s economic infrastructure could bring foreign investors back into stocks and debt, he said, adding that inflation is likely to peak and demand will remain strong.

Potential foreign direct investment inflows, remittances and reserves (RBI) forex reserves are also expected to support the rupee later this year.

On the risks from the current Fed rate-hike cycle, Gupta said he believes they are likely to ease gradually.

“In a very risk-off, you could see the rupee crossing 80, but even then I don’t think we would be in a scenario – given RBI’s intervention – where you would see a sustained decline,” he said.

(Reporting by Anushka Trivedi and Nimesh Vora; Editing by Subhranshu Sahu)


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