|
|
|
RBI expended about $80bn or 15% of reserves moderating rupee fall
|
|
|
|
Top Stories |
|
|
|
|
IANS | 23 Sep, 2022
The
Reserve Bank of India (RBI) now has little option but to let the rupee
slide gently - the rupee is down 9.6 per cent YTD even as DXY has
appreciated nearly 20 per cent, probably the fastest rise on record,
Emkay Global Financial Services said in a report.
The
RBI has expended around $80 billion -- about 15 per cent of reserves --
moderating the rupee fall and that was the apt policy choice then.
As
RBI was selling down dollars, the excess liquidity (as reported at LAF
window) normalised from a Rs 8 trillion surplus to a Rs 1 trillion
deficit presently. This was in sync with its policy normalisation move
as well.
Emkay estimates Central government's balances with RBI at about Rs 3.6 trillion which will eventually ease the deficit.
India's
economic resilience and high frequency indicators are rock solid.
Exports will weigh down on growth a bit later in the year. Indian
markets should outperform but absolute out-performance is unlikely. A
5-7 per cent cut and time correction from the recent Nifty highs of
18,100 is more likely, the report said.
Near-term banks should
under-perform as rupee and bond yields re-adjust. However, credit growth
estimates will be revised upwards and hence not sure whether correction
will be deep enough to trade, it added.
RBI's policy choices now
will be more limited - any significant dollar sales will tighten
liquidity (and interest rates) and start choking growth. Of course, RBI
can supplement the liquidity by doing OMO (buying bonds) to replenish
liquidity - this though can send confusing signals to market as policy
rates are still being tightened. The line of least resistance is now for
rupee to decline and RBI will prefer flexibility over interest rates as
against exchange rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|