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6 May 2016
INR: Weakness ’may’ be here for a while – ANZ
Research Team at ANZ, notes that the INR is one of the worst performing currencies in May.
Key Quotes
• “An unusual absence of auspicious wedding dates in May this year may not be sufficient to prevent INR weakness from repeating.
• INR’s close correlation with the equity market means it is vulnerable to signs of domestic slowdown and any reassessment of US Fed rate hikes.
• With the currency on the rich side, INR’s diminishing positive reaction to rate cuts and slow reform progress also pose risks to the currency, in our view.
• We maintain our year-end USD/INR forecast of 68.5.”
Key Quotes
• “An unusual absence of auspicious wedding dates in May this year may not be sufficient to prevent INR weakness from repeating.
• INR’s close correlation with the equity market means it is vulnerable to signs of domestic slowdown and any reassessment of US Fed rate hikes.
• With the currency on the rich side, INR’s diminishing positive reaction to rate cuts and slow reform progress also pose risks to the currency, in our view.
• We maintain our year-end USD/INR forecast of 68.5.”