Nifty99000 100%

Sensex99000 100%

Exclusive

Rupee firm on dollar inflows

Author: Bharath Sunnam/Wednesday, April 17, 2019/Categories: Exclusive

Rate this article:
No rating
Rupee firm on dollar inflows

The USD-INR pair continued to witness pressure when the Indian economy started to accumulate foreign investments during early February 2019.

Foreign investors have infused more than Rs 66,000 crore in calendar year 2019 till date. With no surprise the largest dollar inflows were seen during the month of March. Traditionally, dollar capital flows will be high in March when compared with the rest of the month, foreign portfolio investors have pumped in $7.033 billion in March 2019. Moreover, there is also a phenomena of witnessing large dollar inflows during the period of general elections. Foreign investors have made a net investment of $9.477 billion YTD 2019 and $5.743 and $ 0.6 billion in 2014 and 2009, respectively. Although, the Reserve Bank of India made an attempt to dilute the effect of inflows on the rupee by introducing a couple of dollar buy/sell swap agreements of $5 billion each, it failed to restrict the rupee gains as the amount was lesser than the inflows. 

Historical data suggests the current positive inflows will continue even after the elections which would further add gains to the rupee. However, any policy action by the central bank to support the USD-INR pair and announcement of dollar buy/sell swap agreements would restrict the rupee’s gains.  

The author is a fundamental research analyst at Karvy Forex & Currencies Pvt. Ltd.

Print

Number of views (507)/Comments (0)

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free