INR: Time To Shine

India will continue to be one of the leading lights in the Asian recovery story, pointing to serious upside potential for the Indian rupee over the coming 12 months. From our perspective, INR gains will be driven by real economic outperformance, improving capital inflows, and a gradual tightening of monetary policy. With this in mind, we have bumped up our end-2009 FX target to INR46.50/US$ (from INR48.00/US$) previously. Technically, a break of neckline resistance at this point would potentially pave the way for long-term appreciation towards INR40.00/US$.

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