USD/INR Edging Back Towards 83.00, RBI Meeting To Discuss Missed Inflation Target

USD/INR is creeping back up towards the 83.00 level. The pair was last at 82.80/850. Note October highs came in close to 83.30. The rupee has underperformed the recent rebound in the USD, with the NEER drifting lower. Still, we remain within recent ranges for this index, last near 69.50 (J.P. Morgan based).

• In terms of even risks, there will be some focus on today's RBI meeting convened to present a letter to the government explaining why the central bank has missed its inflation target (2-6%) for 3 consecutive quarters. The contents of the letter won't be made available initially.
• Given the RBI's bias in supporting the growth recovery, a focus point which Governor Das made yesterday, failing to meet the inflation target for the RBI shouldn't necessarily see a change in policy tact from the central bank (i.e. to a more hawkish outlook). Note the next policy meeting for rate setting is on December 7th.
• While also coming up shortly is the services PMI, with the last outcome at 54.3. Recall early in the week the manufacturing PMI was resilient at 55.3 for October (versus 55.1 previously).