Rupee to Strengthen Post India-US Trade Deal, Expected to Hit 89 Against Dollar

• Bank of America (BofA) predicts the rupee could reach 88.60-89.00 against the dollar by end of March, a 2% increase from previous forecasts.
• The India-US trade deal, including a tariff reduction on Indian products from 50% to 18%, is a key factor in the rupee's improved outlook.
• The rupee surged 1.4% on Tuesday, its biggest single-day gain since December 2018, strengthening to 90.2650.
• Exporters are expected to increase hedging, providing further support to the rupee, after previously reducing it due to anticipated weakness.
• RBI is not expected to aggressively buy dollars if foreign investment returns, having already sold $30 billion between September and November.