Mitul Kotecha , Senior Emerging Markets Strategist at TD Securities, points out that unlike Indonesia, India's authorities have shown limited concern about INR depreciation until now, but new measures on the INR may be announced soon.
“Reports that non resident Indians will be tapped for deposits could herald the beginning of a broader array of measures to help arrest the decline in the INR.”
“Given the Achilles heel of a widening current account deficit, India will likely implement measures to reduce imports and facilitate FX conversions to INR.”
“While such measures would help, an adverse external environment suggests that the INR will continue to depreciate, albeit less quickly over the weeks ahead.”
“We think a move through USDINR 74.00 is on the cards.”
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