RBI remains firm on rate cut to check inflation

RBI Chief Raguram Rajan doesn't seem to act on inflation figures whereas FM, Arun Jaitley as well as streets perceive the cheaper rates would be beneficial for lending business. Such tight actions by imperial bank is quite a lot necessary at this juncture while Indian fundamentals comparatively with other peers are still weaker although growth potentials are lingering.

IMF and World bank have mentioned that they could foresee India would outpace its growth in addition.

"India's growth is expected to strengthen from 7.2 per cent last year to 7.5 per cent this year and next. Growth will benefit from recent policy reforms, a consequent pickup in investment, and lower oil prices," IMF's World Economic Outlook revealed on Wednesday.

This will indeed mean that the prevailing policy norms are quite evident for the future growth. There's unexpressed demand for the U.S. currency that will strengthen years of appreciation because the world is "structurally short" the dollar.

Sovereign and corporate borrowers outside America owe a massive amount in US currency, much of which will need repaying in coming years, data from the Bank for International Settlements evidences.

Hence, in the near term we would not foresee any significant move in INR against USD as it has been trading the range bound.

Quotes: USD/INR = 62.3639, Mid-market rates: 2015-04-16 08:11 UTC