IANS | 25 Apr, 2024
The Indian rupee is expected to appreciate to about Rs 82–82.50 in
FY25 while in the near term, it will trade between Rs 83-83.50 against
the US dollar, a top economist with CARE Ratings said.
According
to Chief Economist Rajini Sinha, the Indian rupee is expected to trade
between Rs 83-83.50 in the near term, though geopolitical tensions may
pose a potential risk.
"We expect INR to appreciate marginally
during FY25 to about Rs 82-82.50, supported by India’s strong
fundamentals in terms of healthy economic growth of around 7 per cent, a
comfortable CAD (current account deficit) of around 1 per cent of GDP
(gross domestic product), and an expected surge in FPI (foreign
portfolio investment) inflows post India’s inclusion in global bond
indices," she said.
Sinha said while concerns regarding the
Iran-Israel tensions have eased, a strong dollar continues to weigh on
emerging market currencies including the Indian rupee.
She said in
the year so far, the rupee remains a top performer compared to some
emerging markets and Asian peers, likely supported by RBI interventions.
Markets
have trimmed their Fed rate cut expectations following robust economic
data and higher-than-expected inflation in the US. Moreover, recent
commentary from Fed officials has been hawkish, Sinha said.
Market
attention is now focused on the release of US GDP data on Thursday and
personal consumption expenditure inflation data on Friday, she said. The
US economy is expected to show resilience. Headline inflation is
expected to inch up slightly while core inflation is expected to show
some moderation.
Any data surprises may cause market participants to revise their US Fed rate cut bets accordingly, Sinha said.