Rupee may go beyond 71 a dollar, says JPMorgan's Jahangir Aziz
All eyes are on the Reserve Bank of India's (RBI) monetary policy decision later today. Economists expect the monetary policy panel to bring down the key interest rates by a quarter percentage point. Jahangir Aziz, head of EM economic research at JPMorgan, shared his take.
All eyes are on the Reserve Bank of India's (RBI) monetary policy decision later today. Economists expect the monetary policy panel to bring down the key interest rates by a quarter percentage point. Jahangir Aziz, head of EM economic research at JPMorgan, shared his take.
“My guess is that this is not a central bank or this is not a monetary policy committee (MPC) that typically will do a 50 basis points (bps) rate cut. I think they will do a 25 bps rate cut. After this 25 bps rate cut for this policy, we have three more rate cuts,” he said.
When asked if RBI will be scaling down its full-year gross domestic product (GDP) forecast, he replied, “I don’t think they will announce any major liquidity supporting facilities. It will be – well we will watch how it turns out and we will provide adequate liquidity.”
On the US-China trade war, he added, “If you look at how trade war has progressed and where the trade war stands right now – which is China breaking 7 and US responding to it which more or less puts an end to any further negotiation. We are looking at about 7.35-7.40 per dollar for yuan for the end of the year.”
On the Indian currency, he said, “We are focussing way too much on the dollar. If you look at the INR/CNY rate, for the last 18 months it has been kept almost stable.”
"Expect rupee to go to 71 per dollar or beyond that", Aziz said.
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