A pumpjack operates on an oil well in the Permian Basin near Orla, Texas, U.S. (Photographer: Daniel Acker/Bloomberg)

Rupee To Remain In The 70s Even If Oil Cools, Says BofAML’s Garg

The new normal for the rupee against the dollar will be in the 70s, according to Bank of America-Merrill Lynch.

“Crude oil has definitely been one of the big reasons why the rupee has weakened,” Rohit Garg, director of Asia FX and Rates at Bank of America-Merrill Lynch, said in an interview with BloombergQuint. “If crude does come off, then what we are going to see is a bit more stabilisation and a two-way market in INR.”

The rupee has depreciated nearly 14 percent so far this year, holding on to the tag of Asia’s worst performing currency. The crude prices rose more than 31 percent during the period, ballooning the country’s import bills. Rupee exchange rates and oil prices, according to Garg, will have a greater impact on inflation trajectory than growth in the next two-three quarters.

Watch the full interview here: