Rupee may gain ground as crude prices ease and FCNR inflows rise, says Navneet Damani

The Indian rupee may appreciate towards 92-93 levels from its recent range of 92-97.5, supported by a 10-12% correction in crude oil prices and anticipated FCNR(B) inflows of $50-80 billion over the next 1-2 months. Navneet Damani of MOFSL cited recent tax reforms on NRI and FCNR borrowings as a key catalyst, with banks launching new structured products to attract overseas funds. WTI crude has eased from an average above $90/barrel in the first five months of the year to closer to $80, which is expected to ease pressure on India's trade deficit and external balances.