Mumbai, Nov 12 – Bank of Baroda says the way the U.S. dollar moves and how the U.S.–India trade talks go will decide how the Indian rupee behaves in November. The bank expects the rupee to trade between 88.5 and 89 per dollar until the month’s end.
The forecast depends heavily on the U.S. dollar’s path and U.S. economic data such as inflation and the labor market. Those figures will shape the Federal Reserve’s policy decision in December, according to BoB.
A breakthrough in the U.S.–India trade deal would boost investor confidence. The bank warned that worries about higher U.S. tariffs could dent the domestic economy, pulling back foreign portfolio investor (FPI) flows.
Over the past month, the rupee stayed flat even as it hovered near a record low, fueled by a stronger dollar, slow investor inflows, and high demand from importers. The Reserve Bank of India (RBI) stepped in on the foreign‑exchange market to curb further declines, a shift from the freer currency swings seen earlier.
Global currencies varied against the dollar last month. Emerging‑market currencies, including the rupee, generally strengthened when advanced‑economy currencies weakened.
The dollar ticked up as many market players now think the Fed is unlikely to cut rates again this year. The Fed may hold off on further cuts because of a lack of clear economic data amid a prolonged U.S. government shutdown.
Over the last month, the rupee ranged from 87.83 to 88.70 per dollar. Its annualized volatility fell from more than 4% in October to 1.2% in November.
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