USD/INR could drift back to the lower end of the 80-82 range near term – Commerzbank

USD/INR pair has rebounded after dropping to near 81.65. Economists at Commerzbank expect the pair to move back lower toward the 80 level.

RBI to hike rates further next week

“We expect RBI to hike rates further next week, albeit by a slower pace of 25 bps to 6.50%. This follows the aggressive hikes last year of a total of 225 bps. 

“RBI could continue to signal further hikes, albeit more gradually, but it could still provide some support for INR.”

“We could see USD/INR drift back to the lower end of the 80-82 range near term, helped along by the softer USD.”