INDIAN RUPEE (USDINR) Strategy : 11.08.2016
The Indian rupee traded on a flat yesterday owing to DX weakness. Moreover, the Reserve Bank of India in its third BiMonthly Monetary Policy review kept the repo rate unchanged at 6.5 percent. Moreover, all the other important rates such as the marginal standing facility and bank rate along with reverse repo rate and cash reserve ratio was kept unaltered at 7 percent, 6 percent and 4 percent respectively.
The central bank has also emphasized adequate provision of liquidity and will continue with liquidity operations, FX intervention to enable fcnr(b) redemption without market disruption. RBI says GST tax implementation will improve business sentiment, retains growth forecast at 7.6 pct for 2016-17.
RBI says "upside" risks to 5 pct inflation target for Mar’17. For the month of August 2016, FII inflows in equities totaled at Rs. 2290.01 crores ($342.45 million) as on 5th August, 2016. Year to
date basis, net capital outflows stood at Rs. 34068.42 crores ($5122.96 million) as on 5th August, 2016.
OUTLOOK
Rupee is likely to trade positive as markets discount the recent RBI monetary policy review where the governor kept the rates unchanged which went with the markets predictions. Moreover,
weakness in the DX will keep the INR supportive.
The Indian rupee traded on a flat yesterday owing to DX weakness. Moreover, the Reserve Bank of India in its third BiMonthly Monetary Policy review kept the repo rate unchanged at 6.5 percent. Moreover, all the other important rates such as the marginal standing facility and bank rate along with reverse repo rate and cash reserve ratio was kept unaltered at 7 percent, 6 percent and 4 percent respectively.
The central bank has also emphasized adequate provision of liquidity and will continue with liquidity operations, FX intervention to enable fcnr(b) redemption without market disruption. RBI says GST tax implementation will improve business sentiment, retains growth forecast at 7.6 pct for 2016-17.
RBI says "upside" risks to 5 pct inflation target for Mar’17. For the month of August 2016, FII inflows in equities totaled at Rs. 2290.01 crores ($342.45 million) as on 5th August, 2016. Year to
date basis, net capital outflows stood at Rs. 34068.42 crores ($5122.96 million) as on 5th August, 2016.
OUTLOOK
Rupee is likely to trade positive as markets discount the recent RBI monetary policy review where the governor kept the rates unchanged which went with the markets predictions. Moreover,
weakness in the DX will keep the INR supportive.
