Rupee to remain in 85-86 level till Budget; current account deficit to be 1-1.5% of GDP: Aditi Nayar
Aditi Nayar, Chief Economist, ICRA, says she expects that the rupee will remain in the 85-86 range until the Budget is presented and that will take care of the Trump presidency transition as well. Once the Budget is presented, and there is some clarity on the US tariff policy front – although possibly we are in for a year where there could be a lot more volatility and a lot more changes as compared to what we have seen in the past coming in from the US – ICRA will take a relook.
The slide of the rupee has accentuated in the last couple of weeks and I am not sure if it is just a coincidence or is it just the timing with the new RBI governor coming on board? Has anything changed in the RBI policy in terms of management of the rupee and the forex reserves?
Aditi Nayar: It is really a global phenomenon right now. EMs are all getting hit. The dollar is quite strong and the way the DXY is moving, it is no surprise that we are going to get some weakness coming in with the rupee. Having said that, the Indian rupee has still been one of the strongest performing EM currencies in the recent period.
I do not think there is any necessary change in the policy as such. It is more a reflection of what is happening globally and the dollar strength which has come in. I am afraid we may be in for a period where there could be such continued volatility going ahead as well, given the fact that there is a lot of policy which is kind of being reset ahead of the US presidential transition as well.
Volatility indeed. But is there a level
