EMKAY ON RBI FX MEASURES ; TACTICAL RELIEF, NOT STRUCTURAL FIX

• RBI measures could curb speculation, raise hedging costs and tighten liquidity, offering near-term support to INR amid FPI outflows. • Special USD window for OMCs could reroute ~$11–12 bn/month of dollar demand, based on ~$20 bn monthly oil imports. • Structural vulnerabilities remain — inelastic oil imports, volatile portfolio flows and risk of abrupt currency pressure. • FY27 CAD could widen to 1.6–1.7% of GDP if Brent stays near $100/bbl. • Higher hedging costs could hurt genuine importers and reduce market liquidity. • Measures may ease short-term INR pressure but do not eliminate underlying dollar demand. • Emkay views these as tactical fixes rather than a lasting solution for the rupee.

EMKAY GLOBAL FIN SERV LTD

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