India Prepared to Devalue Rupee in Response to Trump’s Victory, Aligning with Yuan

Following Donald‍ Trump’s election victory, India’s central bank is prepared to allow the rupee to depreciate alongside the Chinese yuan. This move comes as concerns over potential US ⁤tariff hikes loom large, as reported by insiders⁣ familiar with policymakers’ thoughts.

The devaluation of the yuan could result in ‌cheaper Chinese products, ‍potentially leading to increased imports and further widening India’s ⁢significant trade deficit with China. To mitigate this impact, the Reserve Bank of India is⁤ considering allowing a weaker rupee while‍ utilizing its substantial reserves to manage the decline effectively.

Financial analysts are ⁤already adjusting their forecasts for the rupee. HDFC⁢ Bank Ltd. predicts that the currency will surpass 85 against the dollar within ‌a year, while IDFC⁤ First Bank Ltd. anticipates ‌it reaching 84.50 sooner than their initial estimate of March.

Despite ‌experiencing its most substantial decline since…

2024-11-11 00:31:49
Source from finance.yahoo.com