The Indian rupee is facing stiff resistance against the US dollar in the currency market in 2024. The US dollar outperformed 22 out of 23 Asian currencies this year making them fall to new lows. While the Chinese yuan has dipped to its six-month low, the Japanese yen slipped to its 30-year low. The strong US dollar is showing no mercy to leading local currencies and is hammering its way to the top.
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However, the Indian rupee managed to stay its ground days before the results of the elections were announced, which predicted a complete majority for the Modi-led BJP government. Things took a U-turn as Modi’s BJP failed to cross the majority mark of 272 seats and now relies on political alliances to form the government. The US dollar rose above the Indian rupee on the day of the results and India’s stock market crashed 4,400 points.
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Currency: Indian Rupee Will Be the Top Performer Against the US Dollar in 2024, Predicts Analyst
Candace Browning, Head of Global Research at Bank of America predicted that the Indian rupee will be the top-performing Asian currency against the US dollar in 2024. He explained that foreign investments are pouring into the country and reaping the rewards of the growing economy and markets.
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The USD/INR is currently hovering around the 83.40 mark on Wednesday. Browning forecasted that the Indian rupee could reach 83 by the end of 2024. That’s an appreciation of nearly 0.48% in the next two financial quarters. “We expect the rupee to be the best-performing Asian currency in 2024. We expect it to appreciate to USD/INR 83.0 by end-Q4,” she said.
“This may sound small, but it is remarkable given the strong US dollar and the continued weakness we expect in other Asian currencies. We are also more bullish on the rupee than the consensus. The rupee benefits from robust investment inflows, an attractive yield differential, and low volatility thanks to the skillful management by the central bank,” she summed it up.