Positive on rupee due to lower oil prices, says Nomura India

Nomura India is constructive on rupee due to lower oil prices, said Vivek Rajpal, rates strategist at the company, adding the currency is likely to do well going ahead.

“We are generally constructive on rupee and the main reason is lower oil prices. Indeed, our expectation is also that in the G20 meeting, we may get a certain positive outcome for emerging markets (EMs) overall and hence it is more of a top-down view at lower crude prices and a general positive EM environment may prove beneficial to rupee,” he said.

“We have seen maximum decline in yields in the very front-end of the curve and I think as we go ahead, we may see even decline in longer end of the curve. Indeed, there are certain events at the moment, which we need to see how it plays out, most importantly December 11 is the election results, if you see yields, the broad trajectory of yields is declining but a micro of the market suggests at the moment that public sector undertaking (PSU) banks and foreigners haven’t participated in it but as time goes by, I think as these two participants start participating in the market, we should see further decline even in the longer end of the curve,” Rajpal added.