Expert Analysis on the Future of INR/USD Exchange Rate
By Veronica Dudei Maia Khongwir
As the world's best investment manager and financial market's journalist, I bring you exclusive insights into the Indian rupee's trajectory against the U.S. dollar. According to a recent Reuters poll of FX analysts, the rupee is expected to stay within a narrow trading range in the coming year, thanks to the Reserve Bank of India's consistent interventions.
The dollar's recent decline against major currencies has provided some relief to emerging market currencies, including the rupee. Despite hitting an all-time low earlier this year, the rupee has only depreciated by around 1% so far. This stability can be attributed to the RBI's strategic approach in the FX markets, with foreign exchange reserves reaching a record high of $681.69 billion.
Analysts predict a slight strengthening of the Indian currency in the short term, with expectations of reaching 83.75 against the dollar by the end of November. However, the RBI's intervention is likely to keep the rupee around 83.60 in the medium to long term.
Experts emphasize the central bank's efforts to maintain the rupee at its fair value, as it is currently overvalued by at least 7%. The RBI's focus on the real effective exchange rate is crucial for ensuring export competitiveness and overall economic stability.
In conclusion, while some analysts foresee the rupee hitting a record low in the future, the RBI's proactive measures are expected to mitigate extreme volatility and support a steady exchange rate. Stay informed and make informed decisions in this ever-evolving financial landscape.
