INR gains against USD as Stock Markets Jump
Indian currency gained nearly 0.5 percent against USD as the country eased lockdowns due to COVID-19 pandemic. India has witnessed economic activity crawling back after the government eased rules for companies in various sectors in early May. Automobile companies have reported decline in sales during May 2020 but automobile industry experts are expecting strong sales during June after two months of lockdowns. Indian currency gained 32 paise against USD during early trade.
Indian currency has also strengthened during the recent days due to foreign fund inflows. The government has announced stimulus package and help for MSME sector. Some of the steps announced by the Reserve Bank of India have also helped Indian currency.
During the early trade, INR touched 2-week high against US dollar. Forex market experts have not ruled out further strength in Indian currency against the greenback. Brent crude futures firmed up in the recent weeks and Indian government heavily depends on crude imports. This could be a major factor for Indian economy. As oil prices dropped below USD 30 per barrel, economists were predicting windfall gains for Indian government and oil marketing companies. However, a quick rebound in oil prices in the international markets could rule out any major long term gains for Indian government. It is still not clear how much crude has been stockpiled by Indian energy sector PSUs.
In the recent trading sessions, USD has weakened against Euro and GBP as well. Traders in forex markets are expecting Indian currency to firm up in the coming sessions.