Rupee¡¯s continuous downfall against the US dollar has been a worrying point since the past few months, hasn¡¯t it? Not just once or twice, but the Rupee has fallen to new all time lows multiple times over this period, making one thought strike everyone's mind-Will Rupee fall further?
While the Indian currency has managed to rise in the last few days (including a 34 paise rise today to close at 82.47) after crossing the 83 per dollar mark last week, who knows when it can fall again, like it has done in the past few months.
If you too are curious about whether the Rupee will continue its recent comeback or fall further against the US dollar, here¡¯s what some experts have recently said about the same.
The rupee will fall further against the US dollar over the rest of the year, a Reuters poll last week showed, setting up the currency for its steepest annual decline in at least nine years due to a widening domestic trade balance and surging US interest rates.
It is likely to fall further to 84.50 by December, according to the mean and median forecasts of a poll of 14 bankers and foreign exchange advisors. The estimates in the poll ranged between 83.25 and 86, showing a broad consensus that the Rupee would not recover this year.
Another report by ET mentioned that Rupee could range between 83 and 84 till December end.
Also Read:?5 Years On Since Demonetization, Here's What Happened To The Old 500 & 1000 Rupee Notes
India¡¯s central bank (RBI) is likely to loosen its recent grip over the Rupee, analysts at Citigroup and Barclays Plc said last week, leaving the local currency vulnerable to plumb fresh lows against the mighty dollar.
Citi expects the rupee to push to 85 to a dollar, while Barclays says that the risk of a short-term overshoot to 84-85 is high. Standard Chartered has also extended its long dollar/rupee trade target to 85 after the local currency breached 83, as per Bloomberg report.
If the rupee hits 85 to a dollar by December, it would have lost 12.5% this year, i.e. the steepest decline in a decade. While the Reserve Bank of India has stepped in regularly to smoothen the rupee¡¯s drop, analysts said the intervention is depleting the foreign exchange pile at a robust pace.
Signaling no relief for Rupee even in next six months, UK-headquartered Elara Global Research indicated earlier this month that Rupee could drop to 84-85 against US dollar by March 2023, due to rising crude oil prices, a high trade deficit and depleting foreign exchange reserves.
It mentioned that the Rupee is expected to fall to 83.50 per U.S. dollar by December, before slipping even further to 84-85 by March 2023.
Some analysts are being optimistic about Rupee. As per Financial Express report, Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services expects the Rupee to trade sideways with a negative bias and quote in the range of 81.80 and 82.40.
On the other hand, Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities said that the market will definitely try to push Rupee lower, riding on risk-on sentiment. Given that rally in Rupee is also going to be supported by broader dollar weakness globally, only a strong bid from RBI can prevent Rupee from not sliding lower.?
Also Read:?How A Falling?Rupee?Impacts Your Finances
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