INSUBCONTINENT EXCLUSIVE:
The rupee was then forecast to gain about 1 per cent to 83.30/$ in a year
| File Photo: Shutterstock2 min read Last Updated : Oct 03 2024 | 4:38 PM IST
The Indian rupee will hold steady against the U.S
dollar over the coming year as the Reserve Bank of India will use its considerable FX reserves to reduce volatility and keep the currency on
a tight leash, a Reuters poll found.
While most Asian currencies posted gains against the greenback following the Federal Reserve's
larger-than-expected 50 basis point rate cut last month, the rupee has traded largely flat with the currency, losing just around 0.8 per
cent for the year.Click here to connect with us on WhatsApp
That remarkable stability - which is not commonplace among emerging market
currencies - was mostly because of the RBI's regular interventions in the foreign exchange market using its $692 billion in forex
3.
It was expected to trade between 83.73 and 83.50 per dollar in the next six months, a 0.2 per cent-0.5 per cent drop from around
83.96/$ on Thursday.
The rupee was then forecast to gain about 1 per cent to 83.30/$ in a year.
"We see no sign of change in RBI's
pursuit of a higher reserves buffer, which would limit the appreciation potential for the rupee," noted Claudio Piron, emerging Asia FI/FX
strategist at Bank of America.
"However, persistent dollar depreciation may result in a catch-up move in the rupee in the near term, with
the potential for the rupee to go toward the recent range's bottom."
The rupee's trade-weighted real effective exchange rate stood at
105.45 in August, down from 107.45 in July, according to the RBI's monthly bulletin, suggesting the currency is overvalued by about 5 per
auto-generated from a syndicated feed.)First Published: Oct 03 2024 | 4:38 PMIST
