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MUMBAI (Reuters) - The Indian rupee is likely to strengthen beyond the 80-per-dollar level in 2024, helped by foreign inflows, while the benchmark 10-year bond yield could rise towards 7.20%, Bank of America's (BofA) top India treasury executive told Reuters on Thursday.
The rupee is up nearly 1% against the dollar so far this year against depreciation in most other Asian currencies
The Indian rupee could surpass the INR80-per-dollar level by 2024 thanks to foreign inflows, said Jayesh Mehta, managing director at Bank of America Merrill Lynch. “In my view, inflows through Global Capability Centres (GCCs) will drive the rupee higher,” he said. “Even though merchandise exports will slow … foreign inflows through GCCs, remittances and lower crude prices should be able to cushion the impact and help the rupee”. However, Mehta warned the Reserve Bank of India would act to reduce volatility in the currency, should it arise.
The Indian rupee strengthened at the end of trading on Thursday, reaching 81.95 against the dollar, aided by a drop in the dollar index to multi-week lows and an upswing in forward premiums. Analysists predict that foreign inflows will push the rupee beyond the 80-per-dollar level by 2024. The interest in GBP/INR is on the rise amid investors speculating on a possible higher-than-expected Bank of England interest rate hike. Risk sentiment is looking subdued following the Fed's recent hawkish views and announcement of necessary rate hikes to fight inflation.
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