The recent surge in oil prices and market volatility has caused some dent to the rupee’s strong performance at the start of the year. According to economists at ANZ bank, USD/INR will be caught between higher foreign flows and the RBI’s commitment to keeping the currency competitive. They expect the pair to end 2021 at 74.00.
USD/INR to ease slightly towards the end of 2021
“We remain comfortable with our medium-term assessment as a robust balance of payments position, improving growth and policy normalisation bode well for the rupee.”
“The RBI will of course, continue to temper rupee strength but not deny it, as it will help to manage imported inflation from higher oil prices.”
“We expect USD/INR to moderate to 74.00 by end-2021.”