A look at the current state of the Indian economy and INR
The Indian economy is the tenth largest in the world by nominal GDP and the third largest by purchasing power parity.
India’s Prime Minister Narendra Modi, took office in 2014 and is credited with reviving the economy and reinvigorating India’s foreign policy. Poor infrastructure, and fiscal deficits are a drag on development, but with lower global oil prices, the economy has sustained a growth rate near 7%.
Recent inflows of funds to India have come as stimulus measures in China and Europe eased concern about global growth after India’s Federal budget retained the government’s aim of narrowing the fiscal deficit, while boosting spending on roads, power plants and other public projects.
India, a stable democracy and home to a population of 1.3 billion people, is a significant force in world trade, but growth remains below potential.The government has pledged to further cut the fiscal deficit, stoking speculation of an interest-rate cut by the central bank. India’s monetary policy will be reviewed on 5 April and is expected to keep CPI within 5% by March 2017 (current CPI is 6%).
India’s rupee (INR) is currently near record lows against the US Dollar (1 USD = 67 INR) and is forecast to depreciate further to 73 over the next 2 months due to projected falls in emerging-market assets and weak global sentiment. Meanwhile, the Australian Dollar/INR cross rate has ranged between 45.8 and 52.2 over the past 12 months. It is currently trading around 50 and is likely to remain range bound over the next few months.
Priyanka Mehta is a Senior Foreign Exchange Dealer with Compass Global Markets which is one of the leading FX solutions provider to Individuals, Businesses, Importers, and Exporters in Australia.
For a professional and personalised service, please call Priyanka on 0421 699 620 or email at priyanka@compassmarkets.com
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