Since this coronavirus, the rupee has shown significant resilience and has performed better than other emerging market currencies, says ICICIdirect.
The Indian rupee has touched a new low of 76.86 on April 16 but has outperformed other emerging market currencies in recent weeks as coronavirus continues to spread across the world.
Since the outbreak, the dollar has appreciated by 4 percent and the emerging market currencies have declined 25-40 percent. However, the India rupee has shown significant resilience and depreciated by a mere 6 percent, according to an ICICIdirect report.
It believes that this resilience may continue due to improving macros in India.
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As the RBI has been active and announced measures to check the slide, the pace of rupee depreciation would remain quite slow. It would continue to outperform the emerging market currencies. “We expect some reversal from the crucial hurdle of 78 towards 75.5,” it added.
Historically, the rupee has shown a tendency to appreciate eventually when the RBI has initiated unconventional measures.
The firm expect the USD-INR to find a strong resistance near 78.5. It could decline from these levels in the medium term.
Expect the rupee depreciation to have reduced pace and from 78.5 levels, it is expected to appreciate till 74.5 levels, it said.
The below-mentioned set of stocks, which have net dollar payment, would be the beneficiary of this rupee reversal move. One should start looking into these stocks as the rupee has already seen depreciation from 72 to 76.5 levels.
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First Published on Apr 17, 2020 01:23 pm