Importers are rushing to hedge their dollar positions amid the sharp depreciation of the rupee against the American currency and expectations of further volatility even as exporters are holding off after suffering mark-to-market (MTM) losses on earlier hedges.
The report also said that the domestic currency was likely to trade weak in the near future.
Growth remains weak, inflation is within 2-6% range, rate cut would help recoup forex reserves
The year 2015 is likely to see lower rates to support growth and the Reserve Bank is expected to cut key policy rates by 0.25 per cent in February's monetary policy review meet, says a Bank of America Merrill Lynch report.
The unearthing of capital flight of "black" money Indians have allegedly stashed away in Swiss banks could add $30 billion to the country's forex reserves, says a Bank of America Merrill Lynch report.
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