Indian rupee: probably Rupee will appreciate it, thanks to relief rally in Asian markets



NEW DELHI: The rupee, who has experienced a severe abuse lately, is expected to appreciate thanks to the relief rally in most Asian emerging markets and positive capital inflows, experts say.

The rupee ended for the first time on August 16 under the 70-mark against the US dollar due to strong demand for the greenback during the ongoing Turkish crisis.

The rupee has been in a downward trend amid global uncertainties and concerns about inflation. But it has received some appreciation in recent days.

"INR appreciated because the relief rally is seen in most currencies of Asian emerging markets after new talks between the US and China and sweeping away from the Turkish crisis," said Mustafa Nadeem, CEO of Epic Research.

The rupee was valued with more than half a percent as bearish bets on US dollar.

Meanwhile, Niti Aayog, Vice President Rajiv Kumar, also said that the falling rupee was no cause for concern because it went back to its natural value.

"The rupee rose by about 17 percent in the last three years." Since the beginning of this year the rupee has dropped by only 9.8 percent. "So, it has been restored, it comes back earlier to its natural value," he had said.

According to Nadeem, the Dollar index has declined against a basket of currencies that led to an increase in rupeeas. This fell below the level of US dollar 70 in August, although it is still above $ 70 in September.

The recent positive signals were also helped by a drop in crude oil, with long positions suppressed until two months ago, as concerns about global demand haunt the energy space during the trade war, he said.

"We expect prices to see further pressure as rupeemay further appreciates and the US dollar rupeeto fall to 69.4-69.5 points from the current 70.2 levels," he said.

Minister of Economic Affairs Subhash Chandra Garg also said that the rupee is expected to stabilize at 68-69 per US dollar level, this month on a positive capital inflow.

Recently, Tushar Pradhan, Chief Investment Officer of HSBC Global Asset Management, India, said the Rupee was doing well compared to other emerging markets such as Russia, Brazil, Argentina and Turkey.

According to him, depreciation was largely due to the strengthening of the dollar instead of any inherent weakness in the domestic unit.


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