October 9, 2024
New Delhi, India
USDINR Today
The Indian Rupee (INR) traded flat on Wednesday, following the RBI’s decision to keep the repo rate unchanged at 6.5% for the tenth consecutive meeting. Despite holding rates steady, the Monetary Policy Committee (MPC) shifted its stance from “withdrawal of accommodation” to a more neutral outlook.
Key Highlights:
- RBI Repo Rate Decision: The Reserve Bank of India kept the repo rate at 6.5% during its October meeting. The CPI Inflation estimate for FY25 remained at 4.5%, while GDP growth was maintained at 7.2%.
- Market Factors: A decline in crude oil prices, stronger Asian currencies, and potential RBI foreign exchange intervention might provide some support for the INR. However, outflows from local equities and renewed USD demand could cap any significant gains for the rupee.
- Federal Reserve Impact: Investors are now awaiting the Federal Reserve’s September meeting minutes, which will be released later on Wednesday. The market has priced in an 87% chance of a 25 basis points rate cut by the Fed in November, up from 31.1% last week.
- Global Economic Outlook: Recent comments from Fed Vice Chair Philip Jefferson and Boston Fed President Susan Collins indicate a more dovish stance from the Federal Reserve, adding to global speculation of future rate cuts.
Outlook:
The Indian Rupee is likely to remain stable in the short term as market participants monitor global events, including crude oil price movements, Fed rate cuts, and RBI’s foreign exchange interventions.
Disclaimer:
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