Forecast at 83.50 by 1Q2024 and 82.00 by end-2024 – MUFG

Economists at MUFG Bank are cautious on INR in the near-term, but see scope for USD/INR to fall over the longer-term

Cautious near-term before bond index inclusion flows kick in

We remain cautious on INR in the near-term and forecast USD/INR at 83.50 by 1Q2024 and 82.00 by end-2024. 

Our forecasts imply some underperformance in INR versus Asian currencies over the next 3 months, before improvement over the medium-term as inflows from bond index inclusion kick in more fully.

We continue to see INR’s FX volatility remaining contained by RBI’s aggressive FX intervention strategy on both sides.