Indian Rupee Faces Uncertain Future Following Stable October Amid Rise in US Treasury Yields and Dollar Strength

Possible Rupee Break From Current Range Anticipated As RBI's Forex Market Interventions Viewed as Unsustainable; Volatility Expected to Increase Amid Rising Dollar Strength and Upcoming US Federal Reserve Policy Outcome.

• The Indian rupee is likely to break free of its current range, with the Reserve Bank of India's (RBI) continuous forex market intervention seen as unsustainable in the long run.
• Despite strong local dollar demand and equity outflows, the rupee maintained a narrow range due to RBI's measures to prevent a breach of the record low of 83.29.
• Volatility expectations for the rupee have dropped, but experts suggest preparing for a potential rise in volatility as the RBI's interventions cannot continue indefinitely.
• The US Federal Reserve's policy outcome and a potential rate rise will be key factors influencing the future of the rupee.
• The rupee logged its fourth consecutive monthly decline in October, with a weakening of 0.25%, amid strong US dollar demand and expectations of RBI interventions.

4 Articles

Reuters Reuters Reuters Reuters