Forex Analysis Report - 11/30/19...The Rupee Part Of A Vicious Cycle

India’s economy having deteriorated for five consecutive quarters and hit a six-year low in the middle of the year. This led to India’s central bank cutting their benchmark repurchase rate for the fifth consecutive time this year.

About one month ago, India’s Finance Minister Nirmala Sitharaman announced a cut to corporate tax rates for domestic companies to 22%. The goal was to increase the profitability of Indian’s publicly traded company and level the playing field of Indian companies competing against companies in other countries.

Yet, the Rupee remains the worst currency compared to other currencies in the emerging markets and it has become a vicious cycle. Rupee, declines, foreigners take their money out of India, the Rupee declines more, foreigners take more money out of the India.

India needs all the help it can get as it tries to develop its small corporate bond market to overcome a cash crunch that’s hobbled economic growth.

The rupee is the worst performer among emerging market peers in Asia this half. That’s crimped flows from offshore into corporate bonds.

Weakness in the rupee, though, is making that harder. Foreign investors spooked by the currency’s slide sold 74 billion rupees ($1.03 billion) of local notes more than they bought this month, the most since April, dragging their holdings down to a 2.5-year low of 1.9 trillion rupees.

Source

Monthly Chart (Curve Time Frame) - monthly supply is 73.500 and monthly demand is 63.500.

Weekly Chart (Trend Time Frame) – the trend is sideways.

Daily Chart (Entry Time Frame) – the chart suggests to play the extremes once price reaches the daily supply and/or daily demand.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.