Asian Currency

Indian Rupee Asias Best-Performing Currency So Far In 2024

A pivotal factor in bolstering the rupee is the narrowing of the CAD, expected to transition into a modest surplus within the next two years, according to Yes Securities (India) Ltd.

“This shift is propelled by governmental initiatives incentivising outbound shipments, targeting a combined $2-trillion in merchandise and service exports by FY30,” it said in Feb. 26 note.

The Reserve Bank of India’s intervention aims to maintain stability, and the overall outlook suggests a potentially appreciating rupee in the years ahead, with projections of it reaching the 78 mark by financial year 2026, according to Yes Securities.

The rupee has been moving in a small range in the last two weeks as inflows from foreign portfolio investors, mainly in respect of debt, has kept it well-bid, according to Anil Bhansali, executive director at Finrex Treasury Advisors LLP.

The RBI, which has an interest in protecting exporters from competition from peers, has been buying dollars and keeping the rupee in a broad range of Rs 82.70–83.30 and a narrow range of Rs 82.90–83.10, Bhansali said. “This is keeping the rupee steady with small gains.”

With the upcoming general election and India’s inclusion in JP Morgan’s Government Bond Index-Emerging Markets, the rupee is expected to gain towards Rs 82.50 with the central bank absorbing the flows, according to Bhansali.

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