In USD/INR, economists at Credit Suisse think the Reserve bank of India (RBI) could continue defending 75.50-76.00 levels for the rest of December. Nonetheless, the pair could break above 76.00 next year.

RBI’s long-term preference will likely be one of USD accumulation

“We think the RBI could continue defending 75.50-76.00 levels for the rest of December. Lower oil prices could also provide some short-term relief. However, in 2022 continue to expect USD/INR to trade at the upper end of its 74-76 range (possibly breaking above 76).”

“We think strong domestic demand will push India’s current account more negative. Furthermore, in the long run, we still think the RBI’s FX intervention will continue to show a preference for USD accumulation.”