The USD/INR pair fell in May. In June, USD/INR is forecast to rise after falling slightly at the start , economists at Mizuho Bank reports.
Market participants anticipated investment fund inflow from abroad
“Many states have requested an extension to the lockdown measures. The negative impacts of the lockdown on the Indian economy are undeniable. Thus, many major ratings companies are revising the expansion rate outlook for India downward. The market consensus is that the economy will definitely be weaker than the expected level.
“It should be mentioned that the long-term rate of interest in India for May fell below the 6.00% mark and remained low toward the last half of the month. Given the basics of India, market participants are likely to sell the Indian rupee instead of pip out .”
“USD/INR has been falling supported Indian rupee-buying as generated in special fund inflows. As long as this trend continues, the pair is probably going to fall within the near future. However, if market participants start to possess interest within the fundamentals of India so on better understand the trend, the trend would be inverted, encouraging market participants to sell the Indian rupee , which might reasonably lead USD/INR to start out rising.”
“In terms of external factors, market participants should be particularly aware of US interest rates and therefore the US dollar exchange market, which are associated with speculation about tapering within the US.”