Societe Generale's strategists note that the INR has rallied further, with USD/INR looking to break below the 95 handle as the RBI intensifies its FX defense. The central bank extended FX curbs to GIFT City and broadened use of risk reserves. While these actions may offer short-term INR relief, foreign portfolio outflows and a challenging backdrop limit sustained appreciation, with key support at 94.30/94.15.

RBI intervention meets FPI outflows

"In Asia, the INR rallied further with USD/INR looking to erase 95 handle after the RBI further stepped up its FX defense by backing up its regulatory measures with currency market intervention."

"The RBI late evening yesterday announced extended FX curbs to GIFT City and broadened use of risk reserve."

"Proactive intervention coupled with these measures may provide a short-term relief to the INR but the broader picture remains challenging and FPI outflows stand in the way of more sustained appreciation."

"Technically, the pair has key support around the lower limit of its multi-month range at 94.30/94.15."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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