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Rupee rebounds after RBI tightens FX derivative rules
OCBC strategists said INR gains may be only near term, with sustainability linked to moderating portfolio outflows and easing pressure from oil and US yields.
OCBC strategists Sim Moh Siong and Christopher Wong said the Indian rupee rebounded sharply after the Reserve Bank of India tightened FX derivative rules and added restrictions, alongside higher-than-expected inflation, according to FXStreet.
They cautioned investors not to extrapolate Monday’s gains, arguing the durability of the move depends on whether portfolio outflows moderate and external pressures from oil prices and US yields ease.
The strategists said RBI policy actions may help give INR firmer near term support, but they are unlikely to decisively reverse the rupee’s broader depreciation trend.