By Nimesh Vora
MUMBAI (Reuters) -Goldman Sachs’ gross sales and buying and selling desk is recommending an choices play on the Indian rupee that may repay if the South Asian foreign money rallies to 83 per U.S. greenback over the following 9 months.
The decision — successfully a wager on a 3% appreciation within the rupee from its present degree of 85.50 — is underpinned by India’s enhancing macroeconomic fundamentals, a revival in international inflows, decrease oil costs, and the potential for a U.S.-India commerce deal.
The rupee has lagged behind its Asian friends this 12 months, exhibiting little response to the greenback index’s greater than 9% decline.
Goldman Sachs is recommending shopping for a 9-month USD/INR binary put choice with a strike worth of 83. A binary put choice is a sort of digital choice that pays a set quantity if the foreign money pair settles beneath the strike degree on the expiry of the contract.
“We selected 9-month tenor for the commerce as INR sometimes tends to understand throughout India’s monetary 12 months finish”, which concludes on March 31, in line with a gross sales be aware from Goldman Sachs.
In help of their constructive outlook on the rupee, Goldman Sachs analysts highlighted that India’s GDP development accelerated to 7.4% year-on-year within the March quarter from 6.4% within the earlier three months.
Their month-to-month exercise tracker signifies that consumption remained sturdy in April.
The funding financial institution’s be aware pointed to a return of international fairness inflows, with over $4 billion flowing into Indian equities over the previous two months. Goldman expects this development to proceed and probably speed up, pushed by enhancing company earnings.
The potential of a U.S.-India commerce deal and decrease oil costs might be different catalysts for the rupee. Goldman mentioned {that a} rollback of the ten% reciprocal tariff could be seen as a optimistic improvement for Indian threat property and the rupee.
Whereas the U.S. had initially proposed a 26% levy on Indian shipmemts, the country-specific tariffs have been paused till July 8.
On oil, Goldman’s commodities analysis crew expects Brent crude to common $60 for the rest of 2025 and fall to $56 in 2026. Decrease power costs are a web optimistic for oil-importing international locations like India and will help the rupee.
(Reporting by Nimesh Vora; Enhancing by Mrigank Dhaniwala)
