Current INR weakness has similarity to 2013 – Exporters be prepared to capture the reversal, whenever it starts!

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Current INR movement has lot of similarities to its movement in 2013. Both years have election overhang and macro issues like US rising grows, crude prices etc.

Given below is last five year USDINR graph/ chart.

Other interesting part is swift reversal of weakening trend. Like in 2013 when in only 16 days INR reversed from 68.80 to 61.70, this year also we expect fast retracement. As of now difficult to say when would it start. Possible levels are 73, 75, 77.

In above context, we suggest to increase export hedging when reversal starts. It is important to keep the hedging limits available with banks. It should not happen that when hedging has to be restarted, bank would disallow citing MTM issues etc. Hence it is advisable to engage banks and keep heading limits available.