By laksh5382 
The country is expected to maintain an aggressive energy transition and strong economic growth Rupee Despite the cut in interest rates by the US Fed, it remains stable against the dollar.
India has made significant progress in reducing its carbon intensity, with a 33 percent reduction between 2005 and 2019, according to a UN report. This trend is expected to continue due to investments in renewable energy and transportation electrification.
Dhruv Goyal, CEO, FourLion Capitals, said India will contribute 17 per cent to global growth this year as per IMF estimates and this strong economic expansion along with fiscal consolidation has created a promising backdrop for the rupee.
In this backdrop, he said the country’s energy transition will prove to be an important factor, which will boost the rupee’s strength.
He said lower oil import bill, which historically puts pressure on the currency, would further support the rupee’s position.
Although the rupee weakened due to the Federal Reserve’s aggressive rate hikes, it outperformed other major currencies like the British pound, euro and yen. This performance was supported by India’s strong economic recovery post-Covid and strong foreign capital inflows. Furthermore, RBI intervention, by selling $70 billion from its reserves, mitigated the decline.
Looking ahead, Goyal said the rupee has the potential to enter a ‘golden period’ with market expectations of a rate cut by the US Federal Reserve and the possibility of a rate cut by the RBI.
However, the RBI will need to balance these cuts carefully considering the impact on banking deposits and credit growth.
Overall, the outlook for the rupee appears optimistic, with strong demand expected as India consolidates its role as a major investment destination. He said the RBI’s foreign exchange reserves of $680 billion provide an important buffer, ensuring stability amid potential global economic turbulence.