As a result, the Rupee is expected to trade with a low bias up to 75 to the USD in the coming week.
“Rising crude oil and the trade deficit are keeping the currency under pressure and even REIT outflows have put constant pressure on the rupiah…” said Sajal Gupta, head of forex and rates at Edelweiss Securities.
“It could still lose ground due to the upcoming US Fed meeting and current equity outflows.”
Notably, a rate hike by the US Federal Reserve has the potential to drive more FII money out of India and other emerging markets.
“The normalization of Omicron would also lead to a revival of demand and therefore more imports and more pressure on the rupee… Crude oil prices around $90 a barrel are a warning signal for rising prices. commodity prices in times to come,” Gupta said.
Last week, the rupiah closed at 74.41 to the dollar after weakening to 74.75.
“In the coming days, USDINR price action will be determined by crude oil prices, FOMC meeting outcomes, risk sentiment and dollar inflows,” said Devarsh Vakil, Director. Retail Research Assistant, HDFC Securities.
“The USDINR spot should range between 74.10 and 74.8 next week.”
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said: “Market participants will primarily be keeping an eye on the Fed’s policy meeting this week as the central bank is likely to provide clarifications and details. on the end of quantitative easing, possibly in March.
“Besides the policy statement, preliminary manufacturing and services PMI, advance GDP and core PCE index to gauge a view for the dollar.”