USD/INR: India’s GDP to Remain Tepid in 2020 Warns IMF

The International Monetary Fund (IMF) said in its annual review of India’s economy that India’s GDP will remain subdued in 2020. India’s economic growth stalled in the third quarter printing a lackluster GDP number of 4.5%, its slowest pace in more than six years.

INR didn’t tap into weaker economic activity as it was supported by abroad investments. Since the beginning of the year, the Rupee has managed to post positive gains of 2.16% YTD.

On the foreign exchange market, the value of the Rupee against the US dollar was seen quoted within a trading range of 71.28 and 71.18.

“India is now in the midst of a significant economic slowdown. Addressing the current downturn and returning India to a high growth path requires urgent policy actions,” said Ranil Salgado, of the IMF Asia and Pacific Department.

From the other side of the monetary policy spectrum, the US economy is also projected to slow down to 2% in 2020 versus 2.3% in 2019. According to the IMF experts global growth is expected to grow by 0.4% to 3.4%. Currently, global growth stands at 3.0%, the lowest level since the subprime mortgage crisis. The main culprit behind the slowdown in the global economy was the trade tensions between the world’s two most powerful economies in the world.

The dollar index was seen opening after the Christmas break at 97.64.

The domestic benchmark equity index NIFTY 50 was seen trading lower during early Asian hours and touched a low of 12,181. The Indian 10-year government bond yield was seen quoted at 6.59% compared with its previous close of 6.58%.

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