India’s Eco Adviser: RBI has room to cut rates, USD/INR hits 16-month high above 73.50

Sanjeev Sanyal, principal economic adviser at the Indian Finance Ministry said in an interview on Wednesday, the Reserve Bank of India (RBI) has further scope to cut rates as inflation is set to decline in coming months

Key quotes (via Reuters)

Inflation is likely to fall by at least 100 basis points and that easing interest rates is one of the tools available to shield the Indian economy from the impact of the coronavirus.

Underlying inflation pressures are within control and headline inflation will come down sharply.

USD/INR closes the bearish opening gap

The USD/INR cross reversed sharply from a dip below 73.00 and resumed the recent bullish momentum to renew 15-month high at 73.607, where it now wavers.

The spot opened with a 23-pips bearish gap, mainly driven by the overnight sell-off in the US dollar across the board, in the wake of the emergency Fed rate cut led collapse in the US Treasury yields.