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USD/INR Off Record Highs

INR
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USD/INR moved away from fresh record highs post the Asia close, largely thanks to suspected RBI intervention, although broadly weaker USD sentiment also helped.

  • Late yesterday India wholesale prices printed at 15.08% YoY, above expectations of 14.92% and the previous print of 14.55%. The print for April is a fresh 3 decade high and comes after last week's upside CPI surprise (7.79% versus 6.95% prior).
  • This will keep focus on next month's RBI meeting (June 8th), with further tightening expected after the unscheduled hike in early May. Note the RBI minutes for the most recent policy meeting are due today.
  • Spot USD/INR trended down as the onshore session progressed yesterday. We pushed to fresh record highs of close to 77.80 before reported RBI intervention capped the move. We closed at 77.56. Onshore reports suggest RBI selling of USD/INR could have been in the range of $1-1.5bn.
  • This comes after RBI sold a hefty $20bn in March to curb INR depreciation pressures.
  • The 1 month NDF closed in NY at 77.66, which implies a lower USD/INR spot open today. Still, the risks are INR remains a laggard if this weaker USD persists. Crude futures are higher in early trade as well, recouping some losses from late in NY. Brent was back above $113/bbl.
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USD/INR moved away from fresh record highs post the Asia close, largely thanks to suspected RBI intervention, although broadly weaker USD sentiment also helped.

  • Late yesterday India wholesale prices printed at 15.08% YoY, above expectations of 14.92% and the previous print of 14.55%. The print for April is a fresh 3 decade high and comes after last week's upside CPI surprise (7.79% versus 6.95% prior).
  • This will keep focus on next month's RBI meeting (June 8th), with further tightening expected after the unscheduled hike in early May. Note the RBI minutes for the most recent policy meeting are due today.
  • Spot USD/INR trended down as the onshore session progressed yesterday. We pushed to fresh record highs of close to 77.80 before reported RBI intervention capped the move. We closed at 77.56. Onshore reports suggest RBI selling of USD/INR could have been in the range of $1-1.5bn.
  • This comes after RBI sold a hefty $20bn in March to curb INR depreciation pressures.
  • The 1 month NDF closed in NY at 77.66, which implies a lower USD/INR spot open today. Still, the risks are INR remains a laggard if this weaker USD persists. Crude futures are higher in early trade as well, recouping some losses from late in NY. Brent was back above $113/bbl.