India Ready to Weaken Rupee in Line With Yuan on Trump Win
- IDFC says March 84.5 forecast for USD/INR to be hit earlier
- RBI has been softly pegging rupee against yuan, Emkay says
This article is for subscribers only.
India’s central bank is ready to let the rupee weaken in tandem with the Chinese yuan after Donald Trump’s election win spurred fears of higher US tariffs, according to people familiar with the thinking of policymakers.
A depreciating yuan will lower the cost of Chinese goods, potentially leading to more imports and further widening India’s biggest trade deficit with any country. The Reserve Bank of India is poised to cushion the blow by allowing a weaker rupee, even while using its ample reserves to keep the fall in check, according to the people, who asked not to be identified due to the sensitivity of the matter.