Anna 
The Indian Rupee (INR) faced downward pressure on Monday, driven by the modest recovery of the US Dollar (USD). Despite this, the decline of the INR is expected to be limited due to the positive economic outlook in the Indian economy and the sustained inflow of foreign capital into government bonds. Foreign portfolio investors have notably increased their holdings of Indian government bonds by approximately 50% since the news of their inclusion in the index less than six months ago.
However, the INR may face headwinds from the prevailing risk-averse sentiment, elevated crude oil prices, and higher US Treasury bond yields. These factors could contribute to the strengthening of the USD/INR pair.
Investors are closely monitoring the Federal Reserve’s interest rate decision scheduled for Wednesday, widely anticipated to maintain rates at their current level during the March meeting. Additionally, market participants are eager to glean insights from Fed Chairman Jerome Powell’s remarks during the press conference, as they may offer indications about the future trajectory of US interest rates.
On Thursday, attention will turn to India’s S&P Global Manufacturing and Services PMI data, which will provide further insight into the state of the country’s economic activities.
