InvestorQ : How do you see the Indian rupee / dollar exchange rate impacting the FPI flows in the coming days?
prachi Patwardhan made post

How do you see the Indian rupee / dollar exchange rate impacting the FPI flows in the coming days?

Answer
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5 months ago


Normally, the rupee weakening in India has been an impact of FPI flows rather than a cause for it. FPIs sold Rs.65,000 crore in equity and Rs.59,000 crore in debt in March 2020. Debt selling was a much bigger trigger for weakening rupee. Rupee remains a concern for investors as a weak rupee could wipe out the profits on assets. The rupee has already weakened from 73/$ to 76/$ and the RBI is likely to be a lot more calibrated in its dollar intervention. This concern over the RBI intent to intervene in the current markets and support the rupee also made FPIs sceptical about investing in markets.