Rupee plunge: Will INR hit 75 against US dollar soon? What UBS survey reveals
Financial Express,
August 31, 2019
Even as the domestic currency rupee continues to slide, shedding nearly 4.3% against US dollar in August, global firm UBS notes that corporates don’t expect a major slide going forward. The majority of firms (34%) expect the domestic currency rupee to trade in the 67-70 range against the US dollar (USD) over the next 12 months, according to UBS. “Around a quarter of firms expect it to weaken towards the 70-75 range. Overall, firms expect INR to recover to an average of 67-68 in the next 12 months,” said UBS in its latest report. Notably, the survey responses were part of UBS Evidence Lab which comprised of 267 C-suite executives (including CEOs and CFOs) in July 2019 to gauge the views of broader India Inc.
Notably, the rupee has lost more than 4% in the previous month, even as a confluence of domestic and global factors weigh on the currency. Yesterday, the rupee appreciated by 38 paise to close at a two-week high of 71.42 against the US dollar on the back of a rally in domestic equities and renewed hopes of the US-China trade talks. “We expect the gradual depreciation bias in rupee to be sustained (UBSe: 72/73 for end-FY20/21). Even though we expect India’s external position to remain manageable (current account deficit below 2%), global risk aversion (trade war uncertainty and slowing global growth) could exacerbate the INR weakness,” UBS noted it its report.
Amid the ongoing slowdown, nearly half of the executives expect only modest demand momentum of up to 10% over the next 12 months. “Indeed, the share of respondents expecting double-digit growth in overall demand for the sector has come down from more than 40% last year to only one-third now. Considering a sharp growth slowdown, there is no pressing need to undertake fresh investments by corporates,” said the firm in the report.
https://www.financialexpress.com/market/rupee-plunge-will-inr-hit-75-against-us-dollar-soon-what-ubs-survey-reveals/1692201/
August 31, 2019
Even as the domestic currency rupee continues to slide, shedding nearly 4.3% against US dollar in August, global firm UBS notes that corporates don’t expect a major slide going forward. The majority of firms (34%) expect the domestic currency rupee to trade in the 67-70 range against the US dollar (USD) over the next 12 months, according to UBS. “Around a quarter of firms expect it to weaken towards the 70-75 range. Overall, firms expect INR to recover to an average of 67-68 in the next 12 months,” said UBS in its latest report. Notably, the survey responses were part of UBS Evidence Lab which comprised of 267 C-suite executives (including CEOs and CFOs) in July 2019 to gauge the views of broader India Inc.
Notably, the rupee has lost more than 4% in the previous month, even as a confluence of domestic and global factors weigh on the currency. Yesterday, the rupee appreciated by 38 paise to close at a two-week high of 71.42 against the US dollar on the back of a rally in domestic equities and renewed hopes of the US-China trade talks. “We expect the gradual depreciation bias in rupee to be sustained (UBSe: 72/73 for end-FY20/21). Even though we expect India’s external position to remain manageable (current account deficit below 2%), global risk aversion (trade war uncertainty and slowing global growth) could exacerbate the INR weakness,” UBS noted it its report.
Amid the ongoing slowdown, nearly half of the executives expect only modest demand momentum of up to 10% over the next 12 months. “Indeed, the share of respondents expecting double-digit growth in overall demand for the sector has come down from more than 40% last year to only one-third now. Considering a sharp growth slowdown, there is no pressing need to undertake fresh investments by corporates,” said the firm in the report.
https://www.financialexpress.com/market/rupee-plunge-will-inr-hit-75-against-us-dollar-soon-what-ubs-survey-reveals/1692201/
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