Indian Rupee has remained steady against US dollar days RBI

Reserve Bank of India or RBI stated today that the Indian Rupee (INR) has remained steady against the US dollar, being least volatile among major EME currencies in recent months. Going ahead, restrictive monetary policy by major AEs to achieve the last mile of disinflation could limit attractiveness of EME assets and trigger reversal of capital flows. Crude oil and other global commodity prices could also harden in comparison with the baseline. In this scenario, if INR depreciates by 5 per cent over the baseline, inflation could be higher by around 35 bps while GDP growth could edge up by around 25 bps through short term stimulation of exports. On the other hand, the Indian economy remains the fastest growing major economy globally and is poised to play an important role in revival of global growth. These developments, along with robust domestic macroeconomic fundamentals, inclusion of government bonds in global indices, and faster than anticipated monetary policy easing by AEs would attract foreign investors.

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