Domestic politics to drive rupee: HSBC
Reuters Market Eye - Domestic politics will increasingly drive the fate of the rupee, much like the Japanese yen or the euro, HSBC says in a note on Friday.
HSBC says its base case scenario is for the government to maintain its reform agenda, but warns the parliamentary process is "fraught with downside risks."
"This debate will be a litmus test for the INR and the reform process," HSBC writes. "If we were to a see a reversal of some of these recent reforms, it would undoubtedly put increasing weakening pressure on the INR."
HSBC expects "strong upward pressure" on the USD/INR should the reform process falter, but for the pair to retrace its recent gains should the government gain traction with its policies.
- Tweet this
- Share this
- Digg this
A pick-up in retail inflation to its fastest pace on record will likely force Reserve Bank of India chief Raghuram Rajan to raise interest rates for a third time on Wednesday, crimping growth prospects for an already fragile economy. Full Article
Asia-Pacific M&A volume falls for third consecutive year, deal size grows. Full Article