INR/THB Outlook:
Slightly weaker, but likely to move sideways, as the pair trades below its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Reserve Bank of India is maintaining a flexible exchange rate policy, while the Bank of Thailand is tightening regulations, impacting currency stability.
- Risk/commodities: Oil prices are trading above average, which negatively affects the Indian Rupee due to India's dependence on crude imports.
- One macro factor: Ongoing concerns about India’s rising current account deficit, along with weak manufacturing exports, continue to pressure the INR.
Range:
The INR/THB is likely to drift within its recent range, as current pressures may limit any drastic movements.
What could change it:
- Upside risk: A significant increase in foreign portfolio investments could strengthen the INR.
- Downside risk: If geopolitical tensions escalate, further depreciation of the INR could occur.
