Forex, News, Price Analysis

USD/INR Prediction Ahead of RBI Decision

  • USD/INR has remained within a constricted range lately.
  • The RBI will announce its rate verdict this week.
  • Analysts expect the Indian bank to introduce another rate increase.

USD/INR had its price within a constricted range over the past couple of days as investors waited for the upcoming rate decision by RBI. While publishing this article, the USD-INR traded at 77,61, some points beneath the 77.78 all-time high.

RBI Rate Preview

The Reserve Bank of India began its monthly conference on Monday, awaiting the upcoming interest rates decision on Wednesday. Financial experts expect the bank to raise rates for the 2nd successive meeting as the battle against inflation continues.

The primary scenario is RBI will introduce a 0.40% hike, pushing the base rate to 4.8%Some experts trust the Reserve Bank of India will ensure a complete 0.50% surge before adopting 0.25% hikes in August.

The rate decision comes when India experiences massive inflation, escalated by high natural gas and oil prices. Meanwhile, Bank of America analysts stated that the nation’s inflation would stand at 6.8% this year and 6.5% in 2023.

Kotak Mahindra analyst confirmed interest rate hikes during the upcoming meeting as the United States reflects on moderating quantum and pace of rate increase. Moreover, inflation seems to persist.

The Reserve Bank of India isn’t the only bank increasing rates in 2022. The Fed has introduced 0.75% rate hikes this year and seems ready for more increases throughout the year. The ECB (European Central Bank) will likely hit at rate hikes introduction in July. Also, banks in emerging markets. Including Banxico and SARB started increasing rates.

USD/INR Prediction

The past couple of weeks had USD-INR in a restricted range. The pair trades at 77.60, where it hovered for the past couple of years. The 4hr chart shows the USD/INR created a symmetrical triangle formation.

Moreover, it stayed slightly beyond the 25- and 50-day MAs, whereas the Moving Average Convergence Divergence climbed beyond the neutral territory. Thus, USD-INR will likely see a bullish breakout following RBI’s decision on interest rates. Bulls target the crucial resistance zone at 78.

Stay tuned for upcoming developments in the financial world.

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