Reuters Market Eye - Citi says some investors in Europe referred to India as a 'tease' market, which is on the radar once again due to lower commodity prices, expansionary global monetary conditions and prospects of a good monsoon.
The U.S. bank recently met 40 institutional investors in Europe. The consensus view was that the delta change in sentiment across Indian asset classes-equities, rates and FX-was positive.
Investors said fears of INR weakening to 58-60 to a dollar were now on the 'backburner.'
They, however, expect USD/INR to remain range-bound in the 54-56 band despite the positive impact on current account deficit and dollar inflows as the RBI appears to be unwinding its forward book.
Investors continue to receive rates, with the universal view, that stable or lower commodity prices and INR will provide leeway for monetary easing, Citi says.
"The debate has moved to how much, rather than if, the RBI will cut rates," the note says.
(Reporting by Subhadip Sircar)