Rupee ends a tad higher as dollar slips after US midterms
INDA•The Indian rupee closed at 94.64 per dollar, up from 94.74 in the previous session, as the dollar weakened and oil prices fell. A poll showed analysts still expect the rupee to depreciate over the next few months.
1. Rupee closes higher
The rupee ended modestly higher on Wednesday, supported by a weaker dollar and lower oil prices as investors assessed the US midterm results. It touched a two-week high in early trading before trimming gains as importer and interbank dollar bids gathered around 94.50.
2. Analysts see pressure
A majority of analysts polled expect the rupee to give up recent gains and slip again over the next few months, citing a volatile external environment. Elevated oil prices and weak portfolio flows remain risks, while Reserve Bank of India measures have supported the currency.
3. Structural risks remain
Natixis said the central bank’s interventions and other measures had avoided a disorderly collapse and bought time, but had not addressed the causes of weakness. The note said structural reform was needed to address limited export capacity, manufacturing investment and energy independence.
