Rising Oil Prices and Fears of RBI Intervention Could Limit the Decline in USD/INR – Investing.com India

Rising Oil Prices and Fears of RBI Intervention Could Limit the Decline in USD/INR – Investing.com India

opened the day at 73.49, little changed from its previous day’s close. Despite the robust US retail sales data showing a rise of 0.7% M-O-M in August and the trading at a 3-week high of 92.85, the currency pair can be expected to marginally decline, impacted by the giant leap in domestic stock indices today.

The outlook on the rupee is bullish in the near term and neutral to weaker bias over the medium term. India’s economic fundamentals are improving and the forex reserves of the country is expected to record USD 680 billion by end-March 2022. With the huge forex reserves in place, the Fed tapering announcement may only provide a knee-jerk reaction in the rupee to the 75 levels and not beyond that as it looks now, barring any unforeseen events happening in the interim period. Even if the Fed and ECB announce the quantum of tapering of asset purchases over a period of time, the rupee is expected to remain broadly stable and any intermittent weakness in the currency shall remain unsustainable.

The local stock market has turned extremely bullish with the equities attained the status of a preferred asset class for the investors. At this point