INR to appreciate by around 10% against USD by end-2020 - Westpac
|According to analysts at Westpac, INR still remains much weaker over the year as the past few months have indeed been a bit rocky in India, but recent release of the World Bank’s Ease of Doing Business index highlights the longer-term progress India has made on structural reforms.
Key Quotes
“India placed 77th for 2019, marking an improvement of 65 positions in ranking since three years ago.”
“Markets had been encouraged by this trend, though since the end of 2017, concerns have arisen over India’s twin defi cits amid global pressures relating to high oil prices and FOMC tightening. There is now a clear tension in the Government around maintaining economic growth into the April/May election, while also meeting defi cit targets.”
“Recently a ruction emerged between the Government and the RBI about the amount of profit the RBI distributes. The RBI correspondingly warned against infringing on central bank independence. This points to the next six months being a test of the Government’s resolve.”
“We think markets will remain wary of India in the lead-up to the election and the Rupee is likely to remain near recent lows. Beyond that point, India’s growth prospects and the general trend towards a stronger institutional framework is likely to attract capital into India.”
“With the USD weakening from September 2019, the INR is forecast to appreciate by around 10% to end-2020.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.