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Below 20-Day EMA, Sell-Side Analysts Cut Current Account Gap Forecast For FY24

INR

USD/INR is ~0.2% softer on Monday, printing at 82.30/40.

  • INR is the standout performer in USD/Asia on Monday. Barclays expect the current account gap to be 1.9% of GDP in FY24 and Citi slashed its forecast to 1.4% from 2.2% previously, link is here. A narrower current account deficit could provide a tailwind to the rupee as the deficits in the nation's budget and current account make India more reliant on foreign inflows.
  • USD/INR has opened below its 20-Day EMA (82.44). From a technical perspective if bears close below the 20-Day EMA they can target the 200-Day EMA (80.95). Bulls look to test the 83 handle.
  • Over the weekend the India Finance Minister asked state run banks to identify concentration risks and adverse exposures. The Minister noted that banks should safeguard themselves from any potential financial shock.
  • Data wise the BoP current account balance for Q4 2022 is due some time below now and Friday. The Bloomberg Survey Median Estimate sits at -$23bn, the prior read was -$36.40bn.

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