- Indian rupee loses impulse in the first bars of the European session on Wednesday.
- The RBI MPC cut the repo rate at 25 basic points to 6.0% at the April meeting.
- A growing global commercial war and a possible recession in the US undergo the INR.
- The FOMC minutes will occupy the center of the stage later on Wednesday.
The Indian rupee (INR) extends the fall on Wednesday after reaching the greatest loss in a single day in almost three months in the previous session. The Monetary Policy Committee (MPC) of the Indian Reserve Bank (RBI) unanimously voted to cut the repo rate at 25 basic points (BPS) to 6.00% at its April meeting on Wednesday. The Indian Central Bank made a rate cut for the second consecutive time and changed its “neutral” to “accommodation” monetary policy position to boost the stagnant economy, which faces more pressure for US tariffs.
The local currency is still under pressure in an imminent global commercial war that enlivens fears of an economic collapse. In addition, the continuous exits of foreign capital and the purchase of US dollars (USD) by importers, foreign investors and oil companies weigh on the Indian currency.
However, a fall in crude oil prices could help limit inr losses. It is worth noting that India is the third largest oil consumer in the world, and the lowest prices of the crude oil They tend to have a positive impact on the value of the Indian currency. The operators will closely follow the FOMC minutes Later on Wednesday. In addition, Thomas Barkin of the Federal Reserve (FED) is scheduled to speak.
Indian rupee seems vulnerable amid the turbulence of Trump’s tariffs
- The governor of the RBI, Sanjay Malhotra, said that the Indian economy has made constant progress towards the objective of pricing and sustained growth.
- The RBI MPC reduced the SDF rate to 5.75% and the MSF rate at 6.25%.
- Inflation for fiscal year 26 has been projected in 4% compared to 4.2% forecast in February, while real GDP is now projected for fiscal year 26 to 6.5%. Malhotra del RBI said growth projections have been reviewed down in 20 BPS due to uncertainties in policies and trade.
- The governor of the RBI, Sanjay Malhotra, said that the Indian economy has made constant progress towards the objective of pricing and sustained growth.
- “The rupee experienced a fall in its value against the US dollar, mainly driven by the strong demand for dollars by importers and continuous exits of foreign funds from Indian Variable Rent markets,” said currency operators.
- Pranjul Bhandari, chief economist of HSBC for India, expects consecutive cuts of interest rates on the part of the RBI at the meetings of the Central Bank of April, June and August.
- The US Customs and Border Protection Office said Tuesday that it is prepared to start collecting specific tariffs by country to 86 US business partners.
- Trump said he was not considering a pause in his plan to implement extensive additional tariffs on dozens of countries despite the contact of commercial partners who seek to avoid taxes, but insinuated that he would be open to some negotiations.
- The president of the Fed of San Francisco, Mary Daly, said Tuesday that there is no hurry to cut interest rates since the economy and labor market remain solid and there are still many unknowns about the size and scope of Trump’s tariffs.
- The president of the Chicago Fed, Austan Goolsbee, said that Trump’s tariffs are “much larger” than what had been modeled, and it is not clear how quickly or completely those higher costs will be transferred to consumers.
The USD/INR resumes recovery above the 100 -day Ema
Indian rupee quotes in a weaker tone in the day. The USD/INR pair resumes its upward trend in the graphic Diario, with the price crossing above the average exponential (EMA) mobile key of 100 days. However, a greater short -term consolidation cannot be ruled out, since the 14 -day relative force (RSI) index is maintained around the midline.
The immediate resistance level for the USD/INR is located in the recoil of 86.48. A sustained impulse could lead to the next upward objective at the psychological level of 87.00. The next obstacle is seen in 87.53, the maximum of February 28.
In the lower part, the first downward objective to be observed is 85.42, the minimum of March 31. Further south, the next containment level appears in 85.20, the minimum of April 3, followed by 85.00, the round level.
India Faqs Reserve Bank
The role of the Bank of the Reserve of India (RBI), in its own words, is “… maintain the stability of prices taking into account the objective of growth.” This implies maintaining the inflation rate at a stable 4% level using the interest rates tool mainly. The RBI also maintains the exchange rate at a level that will not cause excess volatility or problems for exporters and importers, since the economy of India depends largely on foreign trade, especially oil.
The RBI formally meets in six bimonthly meetings a year to discuss its monetary policy and, if necessary, adjust interest rates. When inflation is too high (above its 4%target), the RBI will normally increase interest rates to dissuade indebtedness and spending, which can support the rupee (INR). If inflation falls too below the objective, the RBI could cut the rates to promote more loans, which can be negative for the INR.
Due to the importance of trade for the economy, the Bank of the Reserve of India (RBI) actively intervenes in the currency markets to maintain the exchange rate within a limited range. It does so to ensure that Indian importers and exporters are not exposed to unnecessary exchange risks during periods of exchange volatility. The RBI buys and sells rupees in the market in cash at key levels and uses derivatives to cover its positions.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
