Indian Rupee to Take Cues from Regional Peers, Bond Traders Eye Liquidity Moves
The Indian rupee may remain under pressure this week due to persistent foreign portfolio outflows and a strong selling trend in domestic stocks by overseas investors. Government bonds are expected to react to liquidity infusions by the central bank, particularly with the upcoming $10 billion 3-year dollar-rupee buy/sell swap on February 28. Meanwhile, U.S. personal consumption expenditure inflation data will be closely watched to gauge the future path of the Federal Reserve's policy rates.
- The ongoing foreign investor selling trend highlights the vulnerability of emerging markets to global economic sentiment and the need for policymakers to adopt proactive measures to mitigate its impact.
- Will the RBI's efforts to maintain durable liquidity through its monetary policies effectively address concerns about inflation and growth, or will the currency remain under pressure due to structural issues?