Muscat: With the Indian rupee (INR) being highly volatile this month against Omani rial (OMR), exchange experts forecast the currency to reach at INR190.
Talking exclusively to Times of Oman, R Madhusudhan, CEO of Global Money Exchange said that currently the INR against a single OMR is trading at INR185.30 but is likely to depreciate further in the coming months.
“Fundamentally I can tell you that the INR is not very strong. As India is not an isolated country, what is happening around the world is also very important as it affects the currency. For instance, the delay in the Brexit implementation, trade tensions that happened between US and China, geo-political situation, and oil price disruption are some of the major factors which control the currency across the world.
“In addition to that, Chinese currency was also devalued for the first time in 10 years in August 2019. There is a fear of global recession, and all the central banks of various countries are reducing the interest rate due to this fear,” the exchange expert said.
He added that while talking about India, the economy has shown the lowest growth in the last six and a half years.
“Coming back to India, the Indian economy during the last six and a half years has shown the lowest growth at 4.5 per cent as per the June-September data released by the Indian government. This shows the weakness in the economic system. Therefore, due to these factors, the currency is likely to depreciate further.
“INR touched 188 against the OMR in September 2019 and may see it reaching or crossing INR190 in the coming two months (January/February, 2020),” Madhusudhan said.
“It is to be noted that India, being a developing economy, needs to focus on exports. Hence, any appreciation of INR from the present level is detrimental to the interest of exporters and economy,” he continued.
At the beginning of the month, the currency against a single OMR was trading around INR186.6 but started to recover after 10 days and traded at INR183.25 against the OMR.
P K Subudhi, the General Manager at Mustafa Sultan Exchange said that the INR is expected to depreciate further. “During this month, the INR remained highly volatile. On December 3, it was trading around INR186.60 against the OMR, however, it started to gain strength and was then seen trading at INR183.25 by December 12, 2019.
“The appreciation in the currency was seen within eight days due to a huge Foreign Direct Investment (FDI) inflow of around INR420 billion, mainly on account of acquisition of Essar Steel by Arcelor Mittal & Nippon Steel,” Subudhi said.