BRICS Investors Bet: Indian Rupee to Rise, US Dollar to Decline in 2025?
Forex investors are increasingly betting that the Indian Rupee (INR) will rise in value by 2025, while the US Dollar (USD) could experience a downward trend. The speculation is fueled by several factors, including the growing influence of BRICS nations and their efforts to diversify away from the USD.
Why the Indian Rupee Could Strengthen
Many people wonder if BRICS countries, led by India, want to reduce the US dollar's role as the main currency for worldwide trade deals. This ambition is gaining traction, particularly with initiatives aimed at internationalizing the INR. In an attempt to reduce reliance on the US dollar and to internationalise the Indian rupee, the Reserve Bank of India (RBI) allowed invoicing and payments for international trade in Rupees. This move is seen as a step towards a more multipolar global trade structure.
RBI Intervention and the INR
The Indian Rupee (INR) holds steady against the US Dollar (USD) on Tuesday, bolstered by the potential for market interventions from the Reserve Bank of India. Forex market participants predict a potential rise in the value of Indian Rupee. The rising interest in put options is primarily based on bets that the frequency of RBI intervention will come off, following the IMF's criticism, according to the hedge fund. While the RBI has historically intervened to manage the Rupee's value, the long-term outlook suggests a potential shift.
The US Dollar's Uncertain Future
While the US Dollar remains a dominant force in global finance, concerns about its strength are growing. The surge of the dollar has immediate repercussions on BRICS currencies. Thus, the Indian rupee collapsed to 85.93 against the dollar, its lowest historical level, and investors are wary of its long-term stability given geopolitical uncertainties and evolving global trade dynamics.
Investors Bet on BRICS Member India's Rupee
Investors bet that BRICS member India’s Rupee will appreciate. The potential for increased trade in local currencies within the BRICS alliance and beyond is further strengthening the case for a stronger INR. While the path may be volatile, the long-term trend suggests a potential shift in the global currency landscape.
Disclaimer: Forex trading involves risk. This is not financial advice. Consult with a financial professional before making investment decisions.