The Indian Rupee (INR) has traded in a slightly wider range in the last month, after months of tight trading around the 83.30 level against the US Dollar (USD). Economists at ING analyze USD/INR outlook.
Shifting to an asymmetric stance?
At 83.10, the INR is not much stronger than it has been, but it looks as if maybe the Reserve Bank of India is going to be a bit more tolerant of appreciation and practice more asymmetric currency management.
Inflation has crept up towards the top of the RBI’s inflation target range, though this is almost all food-related, and will likely drop back closer to 5% in the near term. However, we still don’t see the RBI easing until after the Fed’s first move.
USD/INR – 1M 83.00 3M 83.00 6M 83.00 12M 84.00