India’s Forex rise despite poor economic conditions
India’s forex reserves recently crossed the $500 billion mark, reinforcing India’s capability to finance imports and repay external debt. Despite this, the Indian Rupee depreciated. This depreciation was a result of –
- Dollar purchases by the RBI to ensure that excess supply does not lead to rapid appreciation
- Uncertainty in the extension of the lockdown affecting the economy negatively
With the global economy in a downswing, a depreciating Rupee will give us an export edge as and when conditions improve.
Here’s an extract from our Monthly Newsletter for June 2020, summarizing the financial impact of last month’s economic events. It also highlights the escalating border tensions between India and China, how companies are shifting to the new WFH culture, highlights of the financial markets and much more.