March 12, 2024
New Delhi, India
USDINR Today
Rupee (INR) weakened in early Asian trading on Wednesday, weighed down by persistent foreign fund outflows from Indian equities. Foreign investors have withdrawn nearly $15 billion this year, pushing outflows toward the record $17 billion seen in 2022.
Despite the pressure, potential intervention by the Reserve Bank of India (RBI) and a softer US Dollar are expected to provide some support. Additionally, strength in Asian currencies, particularly the offshore Chinese Yuan, could help stabilize the INR.
Key Inflation Reports in Focus
Traders are awaiting the Indian and US Consumer Price Index (CPI) inflation reports for February, set for release later on Wednesday. The data could influence the USD/INR exchange rate and shape expectations for future interest rate decisions.
RBI’s Forex Intervention and Market Sentiment
According to government data released on Tuesday, the RBI was a net seller of over $36 billion between June and December to curb volatility and support the INR.
Meanwhile, US economic developments remain in focus. The JOLTS report showed job openings rose to 7.74 million in January, exceeding expectations. Additionally, markets have priced in 75 basis points (bps) of Federal Reserve rate cuts in 2024, with the first cut expected in June, according to LSEG data.
Market Outlook
With US inflation data and Fed policy expectations driving global sentiment, the INR’s trajectory will depend on RBI’s intervention efforts and broader market risk appetite.
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