India's fiscal deficit strains rupee: Angel Commodities Broking

Mr. Prathamesh Mallya (Chief Analyst- Non-Agri Commodities & Currencies, Angel Commodities Broking):

"The fall in Indian rupee can be attributed towards higher crude oil prices, widening trade deficit and higher capital outflows.

Rupee had depreciated by 18 paise today to 65.64 on account of trade deficit from India widening to 28.5% to $13.7 billion in Mar'18 taking the annual deficit to $87.2 billion. Capital outflows too added downward pressure on rupee as foreign investors withdrew Rs.308.13 crore from Capital Markets on Monday.

Global oil prices have also been rallying as Brent crude oil futures were at $71.9 per barrel up 0.4%. Oil prices had risen amid worries of supply rise disruptions especially in the Middle East. INR was also under pressure since yesterday when United States treasury department kept India in its monitoring list for currency manipulation. The US has included India in this monitoring list of major trading partners that merit close attention to their currency practices and macroeconomic policies.

All the factors mentioned above further set the tone for rupee depreciation to move towards 66.2 mark in the near term."

Source : Equity Bulls

Keywords