CITI ON RBI ; FX MEASURES | NEAR-TERM INR SUPPORT

• FX window for OMCs provides direct support by shifting a recurring source of dollar demand away from the market. • FERR impact could absorb around ₹60,000–70,000 crore of liquidity even if importer hedging reduces substantially. • Importers may shorten hedges, shifting some dollar demand toward spot and NDF markets. • Net impact on forward points remains uncertain. • Measures could trigger a knee-jerk INR appreciation followed by consolidation. • Package raises the near-term cost of rupee-depreciation trades but does not remove underlying Balance of Payments pressures.

Citichem India Limited

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