The Indian rupee remained stable as an emerging market currency due to the narrowing current account deficit (CAD) and robust economic fundamentals. In 2023, the rupee was one of the best-performing and least volatile currencies, reflecting the stability of the Indian economy and the return of capital inflows.
It lost 9% to the US dollar in 2023, and 17% over the past two years. Much of that was due to load shedding, which should ease as we approach elections.
The main economic report of the week ahead will be the preliminary estimate of the August PMI. The policy implications are not as obvious as they may seem.