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Mitul Kotecha, Senior Emerging Markets Strategist at TD Securities, suggests that they think of a lot of negativity is now in the price for INR and look for opportunities to enter tactical longs in the near term.

Key Quotes

“Further out, we expect the INR to continue to depreciate, but at a far more gradual pace than recent months.”

“The recent drop in oil prices bodes well for India’s current account and inflation trajectory and will help take pressure off the INR in the near term.”

“We expect the RBI to hike policy rates in August to keep a grip on inflation. We think a hike will also bode well for INR.”

“India is far less exposed to trade tariffs, but external factors continue to pose risks.”

“The outlook for India’s bond market is improving as the government injects liquidity and banks likely reduce their excess SLR holdings.”