inr-currency-symbol - INR
  • Indian Rupee (INR) gains despite GDP slowdown forecast
  • Q4 GDP expected +2.1%, slowest rate in 8 years
  • Trump’s response to China’s controversial law over Hong Kong awaited
  • At 11:30 UTC, USD/INR is trading -0.15% at 75.55 >> Real time exchange rate

The Indian Rupee is advancing verses the US Dollar (USD) for a second straight session on Friday. The Rupee settled +0.34% higher versus the greenback on Thursday at 75.66.

At 11:30 UTC, USD/INR is trading -0.15% at 75.55. This is towards the lower end of the daily traded range of 75.44 – 75.74 as investors await Indian GDP data and ahead of a key speech from President Trump.

The Rupee is on track for a 0.5% increase against the greenback this week, after two weeks of losses. The Rupee is expected to decline -0.6% versus the US Dollar across the month of May.

The impact of the start of the coronavirus lockdown is expected to be revealed in today’s GDP data produced by the National Statistics Office. Analysts are expecting growth of just +2.1% in the final quarter of the fiscal year, which covers January – March 2020. This would be the slowest level of growth in at least 8 years as the covid-19 lockdown, which started in the final 7 days of March is expected to have taken its toll on the Indian economy.

The Reserve Bank of India recently lowered its growth forecast for the coming fiscal year FY20-21 due to the coronavirus crisis. Expectations are for a contraction of -6.8%. The report by the central bank also said that India’s economy could contract by as much as -40% in the April – June quarter alone owing to nearly two months of lockdown.

The Rupee is brushing off souring US – China relations after the two powers clashed over Hong Kong. President Trump is due to give a speech this afternoon on China, where he is expected to provide a response to China’s controversial national security law aimed at tightening its control over the former British colony.

The tone of Trump’s speech will set the risk tone heading into the weekend. A should Trump adopt a firm stance against China, riskier currencies, such as the Indian Rupee could come under pressure, whilst the safe haven dollar could benefit.


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