INR under pressure against USD

Rupee has remained above 60 levels for some time now and recently crossed 61 levels.If we recall rupee had touched all time high of 68 in May 2013 and after that it appreciated back to 61 levels and for some time it touched 58 levels also. The journey from 58 to 68 was very quick and back journey from 68 to 61 was possible due to many steps taken by both Government and RBI

Since October 2013 RBI has been intervening in the dollar market and have accumulated around 20 Billion dollar to give comfort to the India forex reserve position. This along with RBI invention in both spot and forward market has kept the rupee moved around 59~61 for long time.

But this time INR is depreciating due to overall dollar strength in international market, as the dollar index (Dollar Vs major currency) has gone up from 80 levels to 85. Although Federal Reserve has given some relief to all EM currency in its recently concluded meeting, it will not be very far when USA will start increasing interest rate. It is expected that by mid 2015 interest rate will be increased gradually. Back home all Macroeconomic indicators are within comfortable level which should help INR appreciation in the remaining Months of FY15. As the economy activities start increasing backed by government support under “make in India” campaign India may have to increase its import which will put pressure on INR partially.