Rupee Weakens as Manufacturing Cools: A Double Whammy for Indian Economy

The USD/INR pair remains firm around 86.70, driven by renewed US Dollar demand and ongoing FII selling of Indian equities. Meanwhile, India's manufacturing sector hit a speed bump, with the HSBC India Manufacturing PMI dropping to a 14-month low of 56.3 in February from 57.7 in January. Despite the dip, the sector continues to expand, supported by robust global demand. Pranjul Bhandari, Chief India Economist at HSBC, notes that while output growth slowed, overall momentum remains positive. This dual pressure on the rupee and manufacturing sector poses challenges for India's economic outlook in the coming months.
Sources: FXStreet, S&P Global, HSBC India Manufacturing PMI Report