Market Medley

  The Feds decided to keep its benchmark rates unchanged and signaled that there would be at least 2 rates cuts this given the uncertainty of the economic growth.

 USD/INR Exchange Rate Forecast Q1FY26 : 86.25 Q2FY26 : 86.75 Q3FY26 : 87.25 Q4FY26 : 87.50 FY26 Average : 86.94 Key Views: The Indian rupee faces multiple headwinds despite the current account being in surplus. Foreign Portfolio Investor (FPI) outflows and the Reserve Bank of India’s (RBI) substantial outstanding forward contracts have limited the scope for sharp rupee appreciation. While these pressures are expected to ease gradually, any significant recovery will likely depend on a favorable shift in FPI sentiment. The added uncertainty stemming from US tariff policies further complicates the outlook. EUR/USD Exchange Rate Forecast Q1FY26 : 1.10 Q2FY26 : 1.11 Q3FY26 : 1.12 Q4FY26 : 1.12 FY26 Average : 1.11 Key Views: The euro is poised for volatility in 2025, driven by geopolitical concerns and U.S. tariff actions. Nevertheless, Germany's recent fiscal expansion has bolstered optimism for a stronger euro trajectory. While positive sentiment prevails, the lasting impact of US t...

 Overview System liquidity, which comprises banking liquidity and government cash balances, has tightened significantly in FY25, shifting into deficit by mid-January from a surplus of approximately Rs 4.5 lakh crores in September 2024. The Reserve Bank of India’s (RBI) interventions in the foreign exchange (Fx) market to stabilize the rupee and capital outflows from the equity market have led to a major liquidity drain.

  This Tax Alert summarizes recent ruling of the Supreme Court (SC) [1] dealing with the constitutional validity of the provisions concerning power to arrest under the Customs and Goods and Services Tax (GST) law.

India’s GDP growth gained momentum in Q3 FY25, expanding at 6.2%, driven primarily by robust performances in the Agriculture and Services sectors on the supply side, and strengthened Private and Government consumption on the expenditure side. Notably, GDP growth for the previous two years was revised sharply upwards, with FY24 growth now estimated at 9.2% (from 8.2%) and FY23 at 7.6% (from 7.0%). The advance estimate for FY25 was also revised marginally higher to 6.5% from the earlier 6.4%. This revision implies an aggressive 7.6% growth expectation for Q4, which, while ambitious, is likely to be supported by a revival in rural consumption, stimulus from the Maha Kumbh event, and increased government expenditure.