USD/INR to remain rangebound between 73-74 in the medium-term – SocGen

Economists at Société Générale expect the USD/INR pair to stay rangebound in the coming months within 73-74. The spot is hovering around 74.50 at the time of writing.

Stronger dollar and volatile oil prices pose some headwinds

“Equity flows, IPO-related inflows and the prospect of bond index inclusion should remain supportive for portfolio flows in the medium term, while a stronger dollar and volatile oil prices pose some headwinds.”

“We expect USD/INR to remain range-bound in the medium term (73-74).”

“The possibility of a rate hike by 2Q22 should mitigate some headwinds from the Fed’s policy normalization. Consequently, among the Asian high yielders, we prefer INR over IDR.”