INR: Richly priced – ANZ

The strong portfolio inflows seen in 2017 which strengthened the INR is unlikely to be repeated in 2018, suggests the research team at ANZ. 

Key Quotes

 “There is limited room for further RBI easings beyond the one 25bp cut we expect in February 2018. The INR looks over-valued on a REER basis, and higher oil prices could see a slight deterioration in the external deficit.”

“We expect a modest depreciation of the rupee in 2018. How the state elections play out as we approach the 2019 general elections will have some bearing on the INR.”