TIL Desk/Business/New Delhi/ The rupee is likely to get a boost from the government’s PSU bank recapitalisation programme which is expected to support private capex recovery and increase foreign investor interest in domestic equity markets, says a Morgan Stanley report.
According to the global financial services major, “stronger growth and INR correlations with equities are supportive of further currency gains”.
Besides reviving credit growth after a period of weakness post demonetisation, the recap plan will help banks wind down their Non Performing Assets (NPAs) or bad loans and take up fresh credit, which should help boost a private capex recovery in India, the report noted.
According to Morgan Stanley economists, the announcement is not expected to impact fiscal deficit position of the country and inflation number, but is likely to have a positive impact on the economic growth parameter.
