The recent depreciation in the Indian Rupee is unlikely to have any significant impact on CPI inflation in the country, as India has a low dependence on imports for food products, highlighted a report by Bank of Baroda.
The Indian rupee plunged to an all-time low against the US dollar on Wednesday, crossing the psychologically significant 90 mark amid foreign fund outflows. The development came amid firm crude oil prices and perceived uncertainty around the India-US trade deal.
The Indian rupee's recent depreciation against the dollar is temporary and will reverse once India concludes a trade agreement with the United States, according to Anant Goenka, Vice Chairman of RPG Group and President of the Federation of Indian Chambers of Commerce and Industry (FICCI).
Indian rupee breached the 90 mark against USD on Wednesday morning, extending its depreciation run through sessions now, and in the process hitting a fresh all-time low for the Indian currency.
The downside in the Indian rupee, which has been steadily depreciating over the past months, is unlikely to abate soon as it hit yet another record low on Monday.
India is expected to gain a small edge as the US administration has exempted agricultural products from the reciprocal tariffs it had imposed on several countries, said trade think tank GTRI.
The talks for a trade deal between India and the United States are progressing well, and the Bilateral Trade Agreement (BTA) with the United States would be "most detailed and WTO-compliant", government officials said on Tuesday.
The selling spree continued in Indian stock markets on Friday, as both key indices extended their weekly losses, slipping nearly 1 per cent amid weak investor sentiment and a lack of clarity on the much-anticipated India-US trade deal.
"The latest data make one point clear: tariffs have not only squeezed India's trade margins but also exposed structural vulnerabilities across key export industries," GTRI said.
After three consecutive months of persistent selling, foreign portfolio investors (FPIs) again turned net buyers in the Indian stock markets in October.
Addressing reporters after the talks, China's international trade representative with the Ministry of Commerce Li Chenggang said a "basic consensus" was reached after a "in-depth and candid discussion".