Ella 
The Indian rupee (INR) traded negatively on Tuesday amid renewed demand for the US dollar (USD). The Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 6.50%, as expected last week. The Reserve Bank of India remains on the sidelines as it monitors inflation risks. India’s economy grew more than expected in the September quarter at 7.6%, making it the fastest-growing major nation. The RBI has forecast India’s GDP growth at 7.0% in FY24.
This week, domestic and US inflation data as well as the Federal Open Market Committee (FOMC) interest rate decision will have an impact on Indian bond yields and the Indian rupee. Market participants have put the odds of a rate cut by the Federal Open Market Committee starting in March 2024 at nearly 45.6%, with a rate cut of 125 basis points in 2024, according to CME’s FedWatch Tool. (bps) probability is set to 50%.
Investors will keep a close eye on India’s November consumer price index (CPI), industrial production and manufacturing output. In the US, CPI data will be released on Tuesday. Attention will shift to Wednesday’s FOMC meeting, where no changes are expected.
