Anna 
On Monday, the U.S. dollar opened on a lower note, concurrently witnessing a strengthening Indian rupee. The surge in investor inflows into Indian markets and robust growth data have prompted economists to revise their growth projections for Asia’s third-largest economy.
Data released by India’s Statistics Department last week revealed a robust second-quarter gross domestic product growth of 7.6%, propelled by a robust performance in manufacturing and increased government spending.
Anticipation surrounds the upcoming Reserve Bank of India (RBI) Monetary Policy Committee meeting scheduled from December 6 to 8. Market expectations lean towards the RBI maintaining interest rates while adopting a hawkish stance. This stance aligns with the backdrop of escalating economic growth and mounting concerns about rising food prices, which pose upward risks to near-term inflation.
State election results, favorable to the ruling party, are likely to be well-received by investors and financial markets. The outcome eases political uncertainty and assuages concerns about significant fiscal populism in the lead-up to national elections.
In the upcoming week, investors will be closely monitoring the release of the S&P Global India Services PMI for November, expected to dip slightly to 58.0 from 58.4. However, the focal point remains the Reserve Bank of India’s interest rate decision on Friday, with prevailing expectations pointing to rates remaining unchanged at 6.50%. The central bank’s decision is poised to offer insights into its monetary policy approach amid the evolving economic landscape.
The combined impact of strong economic indicators, stable interest rate expectations, and positive political developments is likely to contribute to the Indian rupee’s ongoing momentum against the U.S. dollar. Market participants will be closely navigating these factors, keeping a keen eye on India’s economic performance and central bank policies in the weeks ahead.
