USD/INR: The 73.00 level is the RBI's red line for rupee strength – Credit Suisse

In India, the market still continues to expect tight management of USD/INR by the Reserve Bank of India (RBI). Price action of late suggests the RBI’s near-term “red line” has shifted to 73.00 in USD/INR, economists at Credit Suisse report.

The RBI moves its “red line” for rupee strength 

“Now that India’s COVID-19 cases have stabilised and the economic outlook is improving, the RBI appears to be more tolerant of incremental rupee strength.”

“Evidence of the RBI’s new USD/INR intervention levels will not be clear until we see further FX reserve data. The next two releases for the weeks of 3 and 10 September will be key. For now resistance at 73.00 is a strong hint that the RBI has laid down its near-term ‘red line.’ As such, we think further rupee appreciation will likely be limited.”