Nomura: RBI will take more steps if rupee continues to fall: Nomura

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reserve Bank of IndiaThe move is a bold statement on this Posture strategy, but one will have to wait and see if these measures really turn the tide in America’s favour, says nomura Economist. If measures fail to rein in RupeeThe central bank cannot hesitate to announce further measures to increase foreign currency Concerns remain regarding current account and balance of payments.

The measures may be in addition to central bank intervention in the money markets. Sonal Verma, Chief India Economist, Nomura, told ET, “If the pressure on the rupee continues, more measures may be announced by the central bank. “Anything That Helps Bring More Dollar reduces dollar outflow either to the capital account or can be declared with continued intervention in the current account.

The Reserve Bank of India on Wednesday announced measures to boost foreign exchange inflows and rein in the value of the rupee, which touched a record low of Rs 80 against the dollar, with foreign investors buying and opening short-term corporate loans. permission was included. of more government securities completely under the accessible route. Apart from this, it also announced a limited period exemption from statutory exemption for a limited period of time. “This could be one of the many measures they are going to announce,” Verma said.

Nomura sees a limited impact of these measures on the external sector balance sheet. Factoring in recession concerns in the United States and the euro area and an aggressive Fed-fighting inflation, Nomura found a current account deficit of 3.3 percent of GDP and a balance of payments deficit of $70 billion with a forecast of 82 percent for FY23. is of Rs 81 by September and Rs 81 by December, which means more measures are needed to fix the outer sector.

India economist Aurodip Nandy highlighted the challenges facing policymakers in the current global environment, which is clouded by the risk of recession and high inflation. “Higher inflation is eating away at the domestic balance sheet” Nandi said

Nomura has retained India’s 2022 growth forecast at 7.2 per cent, but lowered its FY23 growth forecast to 4.7 per cent from 5.4 per cent. Nandy said, “It seems that looking at the origin of the (global) recession we are entering, when the turning point comes, it will depend a lot on when you control inflation. . It’s tough dragon.”

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