Analysts revise India’s balance of payments forecast to a surplus after RBI interventions and lower oil prices ease Rupee pressure.
The Indian Rupee stabilizes after two sessions of gains against the US Dollar, with analysts capping near-term upside for the USD/INR pair. Declining global oil prices and recent Reserve Bank of India policy moves have eased downward pressure on the INR, prompting economists to upgrade balance of payments projections to a small surplus from earlier deficit forecasts.
The RBI’s comfort with Rupee strength may determine the extent of any rally, as the central bank considers reducing its $104 billion foreign exchange forward book. Short-dollar positions surged to record levels in March during INR defense efforts. Meanwhile, Indian equities dip after a bullish open, reflecting caution ahead of the US Federal Reserve’s policy decision.
Markets await Fed Chair Kevin Warsh’s tone, though rates are expected to remain steady at 3.50%-3.75%. The mixed sentiment follows Tuesday’s institutional data, underscoring sensitivity to global monetary cues.