Vehicle sales strength, rupee weakness

The jump in passenger vehicle sales in August contrasts with other indicators showing that the post-lockdown economic recovery is stuttering. We suspect this is mostly a reflection of consumers making purchases that would have occurred during the lockdown, so purchases should drop back once this backlog clears. Meanwhile, the  rupee has weakened slightly against the US dollar so far in September, and we think it is likely to continue depreciating over the coming months.