INR/THB Outlook:
Likely to decrease, as the rate is below its recent average and near recent lows, pressured by local economic concerns.
Key drivers:
• Rate gap: The Reserve Bank of India (RBI) maintains a relaxed approach compared to the more aggressive stance taken by the Bank of Thailand, which is working to stabilize the baht.
• Risk/commodities: The recent rise in oil prices is challenging for India, as it heavily relies on oil imports, contributing to the INR's decline.
• Current Account Deficit: India's persistent current account deficit is widening due to a trade imbalance, which continues to exert downward pressure on the rupee.
Range:
The INR/THB pair is likely to hold near current lows but may drift further within its recent 3-month range.
What could change it:
• Upside risk: A significant increase in foreign portfolio investments could boost the INR.
• Downside risk: Continued geopolitical tensions negatively impacting investor confidence could further weaken the INR.
