Stay long in Rupee, says Nirmal Bang

Nirmal Bang has come out with its report on rupee. According to the research firm, rupee is likely to appreciate further on the back of strong inflows and the positive development on the fiscal front, revise rupee target to 52 against the US dollar from 52.50 in short-term. Investors should remain long for short-term gains in the rupee.

The Indian rupee rose to a 4-1/2 month high on Thursday, breaching the psychological level of 53 to the dollar, on strong capital inflows, with further gains expected after the government stuck to its borrowing target for the fiscal year.  The government said after the close of markets it will stick to its fiscal second-half borrowing plans of 2 trillion rupees and will not exceed the budgeted borrowing via bonds. 

Plentiful global liquidity after a third round of quantitative easing from the Federal Reserve has also helped, with Indian equities attracting more than $3 billion in foreign investor inflows in September alone.  The rupee is likely to appreciate further on the back of strong inflows and the positive development on the fiscal front. We revise our rupee target to 52 against the US dollar from 52.50 in short-term. We recommend investors to remain long for short-term gains in the rupee.

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