The rupee plunged to a fresh 13-month low in trade on Wednesday as brewing financial crisis in Russia continued to raise concerns about foreign fund outflows.
The rupee made the day's low of 63.89 against the US dollar. In the last one month-and-a-half, the rupee has tended to decline against the US dollar, with the pace accelerating in the latter part of November and December.
It has been depreciating since the beginning of November 2014. CARE Ratings expects the domestic currency to hover between Rs 64 and Rs 65 a dollar in the coming days until there is intervention from the RBI and the global situation returns to normalcy.
Overall, the rupee has recorded a 2.9 per cent depreciation against the US currency. There may also be measures imposed on gold imports in case the available data suggests a continuation of the trend of increasing imports.
According to experts, the near-term trend looks volatile and the currency may touch levels of 64/USD. HSBC forecasts 2015 to be a better year, while Deutche Bank and Barclays foresee a slide in the currency in the next year.
The sell-off in emerging market currencies seems somewhat indiscriminate right now. But what will happen over the next month or so is that the market will become more discriminatory as the sell-off will stabilise or reverse for a number of Asian currencies, say experts.
"The situation in Asia is totally different from that we saw in 1998. Yes, the Indian rupee cannot really challenge the broad dollar strength. But I do think that the decline in the Indian rupee is going to be very minor. We have currently traded down to close to 63-64," says Robert Parker, Senior Advisor, Credit Suisse.
"Some further slippage in the first half of next year is inevitable. But I would emphasise that it is going to be a moderate move. It is going to be nowhere of the order or magnitude that we have seen previously," he adds.
Read more at: EconomicTimes
No comments:
Post a Comment