RBI can spend $30 billion of forex reserves to defend rupee: Deutsche Bank
RBI) can spend up to $30 billion from the over $594 billion of forex reserves to defend the domestic currency and even though the country will be left sufficient reserves to take care of import bills for next ten months, reported PTI. The German brokerage said the Indian rupee is trading close to around ₹83.30, its all-time high against the US dollar, and the Reserve Bank is actively intervening in the forex market to curtail volatilities.
"...the RBI can easily spend at least USD 30 billion to defend the rupee, and even then, the import cover will remain around 10 months," the brokerage said in its report. The Indian rupee rose by 5 paise to close at 83.06 against the dollar at the end of the day's trade.
The Deutsche Bank report said on a decline in the vegetable prices, the headline inflation is likely to down sharply to 5% for September, from 6.8% in August. At the same time the brokerage noted the global crude prices have registered a hike $95 a barrel in recent past.
However, the Indian customers are unlikely to feel the impact of global crude prices hike, owing to the upcoming state elections, which will be followed up with general elections, the report said. The report further said that the Union government in August last week cut prices of domestic cooking gas up to ₹200 per cylinder, which is likely lead to a 0.25% decline in the consumer price index (CPI).
Ideally, a 10% spike in crude prices can otherwise impact consumer price inflation by 0.30%, the report added. The brokerages kept its FY24 GDP growth outlook to 6.2%, saying that if domestic fuel prices are not raised, then they are unlikely to have any meaningful impact on growth estimates The brokerage said headline inflation can fall below 4% in
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