INR: A reprieve from the budget – ANZ

Irene Cheung, Senior FX Strategist at ANZ, suggests that the Indian government has retained the budget deficit target for FY16/17 at 3.5% of GDP, against market fears of fiscal slippage.

Key Quotes

“Our economists now see a good chance of a 25bp cut by the RBI, possibly after the February inflation prints on 14 March.

Market reaction has been mixed – more positive for the bond market than the stock market. At any rate, this will provide a reprieve to the INR.

That said, the long-term up-channel in USD/INR will likely remain intact, with support coming in at around 67.0-67.5. We see scope for INR to gain ground in the coming weeks.”

Irene Cheung, Senior FX Strategist at ANZ, suggests that the Indian government has retained the budget deficit target for FY16/17 at 3.5% of GDP, against market fears of fiscal slippage.

(Market News Provided by FXstreet)

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