High CAD, Fed's rate hike course likely to keep rupee under pressure in 20232 min read . Updated: 06 Jan 2023, 03:01 PM IST
- BNP Paribas analyst estimates India's CAD to stay north of 3% and require financing. Thereby, RBI will be looking to add to its pile of forex reserves which is likely to be the key reason for the rupee's underperformance.
Indian rupee may underperform its Asian counterparts in the current year due to the high current account deficit (CAD) which is likely to push RBI for opting to absorb dollar inflows to rebuild its forex reserves. Also, the possibility of the US Federal Reserve hiking key rates more than markets expectations remain higher which may further dampen rupee's performance.
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