RBI has the firepower to defend rupee: Nomura

Rupee may rise towards the 52 levels over the next month on heavy RBI interventions, long dollar positions and the prospect of additional RBI measures, Nomura says.

Contrary to market thinking, the RBI does have the resources to intervene in FX markets, with $260 billion in reserves enough to cover imports 6.5 times and short-term debt 3.1 times, Nomura says.

Near-term, rupee gains could prove short-lived if global risk environment deteriorates, given RBI's recent moves on foreign currency deposit and export credit are, on their own, unlikely to spark a significant rupee rally, says Nomura.