New Delhi: The rupee is likely to be under pressure in the near term but it will appreciate a little from the current level to around Rs. 57.5 against the US dollar by the end of this fiscal, according to research firm D&B.
External market volatility and high Current Account Deficit (CAD) are still weighing on the currency and will keep it under pressure, it said.
“By this calender year end, rupee is likely to be around Rs. 58.5/dollar to Rs. 59/dollar, while by March 2014 it is likely to be Rs. 57.5/dllar,” global research firm Dun & Bradstreet senior economist Arun Singh told PTI.
He further said: “Rupee is likely to be under pressure in the near term and would hover around Rs. 61/dollar to Rs. 61.5/dollar levels and even if it crosses the Rs. 62/dollar level it is likely to be temporary in nature (just for 1 or 2 days).”
There are two major factors behind the rupee fall – one is international and the other is domestic, he added.
“Although domestic concerns are a major factor behind the rupee depreciation, these very concerns were still there even six months back, when rupee was around Rs. 52/dollar,” Singh said.
The rupee has depreciated 13 per cent since May. It has witnessed a sharp fall since May 22 announcement by the US Federal Reserve that it may consider withdrawal of its liquidity injecting stimulus programme in a phased manner, which led to a sell-off by investors.
Meanwhile, the Reserve Bank of India has announced several measures to contain the rupee fall since July 23.
Last week, RBI made it mandatory for foreign institutional investors to obtain the consent of holders of participatory notes and derivative instruments before hedging.
Earlier, it had tightened liquidity for banks and taken steps to curb speculative activity in forex markets.
However, despite the slew of steps taken by the government and the central bank in the past few weeks, the rupee fell by a massive 67 paise to all-time closing low of 61.10 against the US dollar on Friday.(profit.ndtv)