The INR has stabilized of late, being able to outperform some Asian peers so far this month, explains Frances Cheung, Research Analyst at Westpac.
Key Quotes
“Suspected FX intervention may have contributed to the INR performance: INR liquidity has tightened over the past couple of weeks, while net long position (up to 1Y) on India’s forward book continued with its declining trend.”
“INR stability may be sustained if overseas remittances become stronger, further funding the trade gap. The 50DMA at 72.0 is the next support for USD/INR while previous high of 74.5 is the resistance.”
“Bond market participants may watch out for the OMO purchase plan, to see if the authority eases back liquidity.”
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