More Stories

Informist, Tuesday, Jun. 24, 2025

 

--MPC Bhattacharya: Oil imports from US to push up logistics cost 
--MPC Bhattacharya: See more oil, LNG imports from US in future 
--MPC Bhattacharya: See rupee 84.50-86.50/dlr in near term on capital flows 
--MPC Bhattacharya: See rupee 84.50-86.50/dlr near term on RBI intervention 
--CONTEXT: MPC member Saugata Bhattacharya at Exim Bank's event in Delhi 
--MPC Bhattacharya: Bit worried about global remittances

 

NEW DELHI – Saugata Bhattacharya, external member of the Reserve Bank of India's Monetary Policy Committee, expects the rupee to be in the range of 84.50-86.50 against dollar in the near term, given the current economic conditions, he said Tuesday. "My sense is given capital flows and potential interventions (by RBI) because they also need to build their reserves, 84.50 would be the lower bound and on the upper side, 86.50. That is a huge range. But let's play safe," he said at Exim Bank's Trade Conclave in Delhi.

 

Bhattacharya said other than trade deficit and current account deficit, the movement of the dollar index - which is likely to be very high - will impact the Indian unit's levels. "Together with the trade deficit, the balancing factor of capital flows which impacts the balance of payments, is the one that will drive currency," he said. Besides, citing the view of policymakers, Bhattarcharya said that the US Federal Reserve might cut rates in July. If that happens, together with the US' "Big, Bold, Beautiful Bill", it will drive currency flows, he said.

 

The dollar index, which had strengthened earlier, fell to an over one-week low of 97.69 after US Federal Reserve policymaker Michelle Bowman Monday made a case for faster interest rate cuts. Bowman's dovish comments came at a time when the US labour market is experiencing a fragile and softening phase. This led to rising expectations of a rate cut as early as in the US Federal Open Market Committee's meeting in July. Following her comments, traders now see a 22.7% probability of a rate cut, from 14.5% on Monday, according to the CME FedWatch tool.

 

Bhattacharya also said that global savings have come down, particularly from China, because all central banks are reducing their balance sheets. "So, less amount is available for deploying into emerging markets," he said, raising caution against remittances flows. "If global growth slows, there are large amount of remittances from developed markets that is also going to be impacted," he said. 

 

India has been a top recipient of remittances, with inward remittances to the tune of $137.7 billion in 2024, RBI had said on May 29. A robust outlook for India's services trade balance and inward remittance receipts was expected to keep the current account deficit well within sustainable limits during 2025-26 (Apr-Mar), the central bank had said in its annual report for FY25.

 

India's current account deficit was contained at $37.1 billion, or 1.3% of GDP, in Apr-Dec, compared with $30.7 billion, or 1.1% of GDP, a year ago. Inward remittances and net services receipts also helped India largely offset an expansion in merchandise trade deficit. India's merchandise trade deficit during Apr-Dec widened to $210.77 billion from $189.74 billion a year ago, up over 11% on year.

 

Speaking about the factors that will impact domestic markets, Bhattacharya said oil prices would have to be watched out for, as the US might now push for more crude and liquified natural gas imports from it, which would push up logistics cost. Under the trade agreement with Washington, New Delhi may have to agree to energy imports, which is expected, he said, adding that rising logistics cost might lead to inflation. "But we have to wait it out," he said.  End

 

US$1 = INR 85.96

 

Reported by Sagar Sen and Priyasmita Dutta

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.