India: Still bearish on INR
- INR has been an underperformer in Asia since mid-2012 with a 15% depreciation. The weakness can be attributed to fading FII and other capital flows, a persistent and large current account deficit and no policy support for the INR (lack of policy reforms as well as insufficient RBI intervention).
- However, The downside risks to our view of a weaker rupee are (1) lower oil prices (2) another round of QE by the Fed (3) large RBI intervention (but the central bank will be wary of losing too much reserves); (4) fuel price reform (which could get delayed to June)
Thanks and Regards
Rohit Saxena
Losers say it is hard and impossible, but winners say it is hard but not impossible." Rohit Saxena
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