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USD/INR Trying To Break Higher

INR

Spot USD/INR opened higher today, above the 77.70 level. This is line with broader USD strength.

  • As we have noted in recent sessions, the pair has struggled above 77.70 in recent weeks, likely on account of RBI intervention risks.
  • Short term headwinds persist for the rupee though. Oil remains around recent highs, while equity outflow momentum continues from offshore investors.
  • After outflows of close to $4.9bn in May, the trend in June has been more of the same, with over $500mn in net outflows already recorded for the month.
  • A reminder that tomorrow's RBI decision should see a 50bps hike in the policy rate, taking it to 4.80%. The market doesn't expect any change in the Cash Reserve Ratio.

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