SO THE INR IS STRENGTHENING; BUT ARE WE MISSING THE PLOT?

     

Back in December 2016, the USD-INR was quoting at Rs.68.5/$. The rupee had weakened sharply in the aftermath of the demonetization drive and was threatening to convincingly break the lows of August 2013. Most currency experts and analysts were of the view that in Real Effective Exchange Rate (REER) terms, the rupee was already overvalued and hence this was more of a fundamental mean reversion. The general consensus (well almost) in December 2016 was that the INR would eventually gravitate towards the Rs.72/$ mark where it would stabilize. Exactly 8 months later, these projections of the INR have gone absolutely awry as the INR has appreciated sharply to the level of Rs.63.84/$.                                                        

                                                                                                                                                                                                                                                                                                                  Source :-Angel Broking Blog.