The US dollar/INR climbs on the fixed demand for the US dollar and the flows of foreign funds
- Indian rupee weakens in the early European session on Tuesday.
- Renew the demand for US dollars and continuous external flows to influence INR.
- Consumer confidence in the Conference Council is scheduled to arrive later on Tuesday.
The edges of the Indian rupee (INR) are lower on Tuesday. The local currency is still under pressure amid the US dollar request (USD) from oil companies and the pressure of foreign foreign investors. Fears of external flows in foreign portfolios (FPI) continue to undermine inr.
However, the intervention of possible foreign currencies by the Indian Reserve Bank (RBI) may help reduce the INR losses. Consumer confidence in the conference council will be the most prominent later on Tuesday, followed by the FHFA home price index and the Richmond Virus Index for Manufacturing. Federal Reserve officials (Fed) Michael Barr, Thomas Barkin and Lorie Logan will speak on the same day.
Indian rupee is still fragile amid global signals and foreign box flows
- RBI will exchange/sell/sell for $ 3 billion on Friday, which would put about 870 billion rupees of liquidity in the banking system.
- Economic growth in India is estimated in the third quarter of the current fiscal year 2024-25 (Q3FY25), with GDP growth by 6.2 %, an increase of 5.4 % in Q2FY25, according to Al Ittihad Bank in India.
- The HSBC India (PMI) has decreased to 57.1 in February 57.5 in January. The Indian Service Manager Index rose to 61.1 in February 56.5 before. The compound participation managers index rose to 60.6 in February 57.7 in January.
- The US Central Bank needs more clarity before considering reducing interest rates again.
- The National Activity Index in the Chicago team in -0.03 came in January compared to 0.18 before (it was reviewed from 0.15).
USD/Inr sticks to a positive bias despite monotheism in the short term
Indian rupee is trading in negative lands today. The constructive view of the pair of the dollar/INR in play remains as the price remains higher than the SIA moving average for 100 days (EMA) on the daily time frame. However, the 14 -day relative index (RSI) hovering around the midfield near 50.0, indicating that more monotheism or the negative side of the cards.
The immediate level of resistance to the US dollar/INR near the psychological level appears 87.00. If the pair continues to print the upholstery candles, we can see enough purchase pressure to pay the price to the highest level near 88.00, on its way to 88.50.
If the bullish momentum fades and the lowest level on February 12 in 86.35 does not keep support, the husband may slip less than 86.14, the lowest level on January 27. The level of additional dispute to watch is 85.65, which is the lowest level on January 7.
RBI common questions
The role of the Indian Reserve Bank (RBI), with its own words, is “… to maintain the stability of prices taking into account the goal of growth.” This includes maintaining the inflation rate at 4 % stable in the first place using the interest tool. Foreign trade, especially oil.
RBI officially meets in six two -month bilateral meetings to discuss its monetary policy, and if necessary, adjust interest rates. When inflation is very high (4 % higher than its target), RBI usually raises interest rates to deter borrow and spending, which can support rupee (INR). If inflation is much lower than the target, RBI may reduce prices to encourage more lending, which can be negative for INR.
Due to the importance of trade in the economy, the Indian Reserve Bank (RBI) is actively interfering in the foreign currency markets to maintain the exchange rate within a limited range. It does this to ensure that the Indian importers and exporters are not exposed to unnecessary currency dangers during periods of foreign exchange fluctuations. He buys RBI and sells rupees in the immediate market at the main levels, and uses derivatives to surround their positions.
