Edelweiss Pegs Rupee Year-End Target At 72/$
The Indian rupee may fall to as low as 72 against the U.S. dollar in the current financial year, according to the latest forecast by Edelweiss Forex & Rates.
That’s against the earlier forecast of 67.50-71 levels, said Sajal Gupta, head, Edelweiss Forex & Rates. Rising global volatility and the domestic currency’s increasing sensitivity to it prompted Edelweiss to revise the forecast.
The rupee, according to Gupta, has been under pressure due to a series of events:
- Stopping buyer’s credit to local corporates after the Nirav Modi fraud created supply constraints on the dollar side.
- A steady rate hikes by the U.S. Federal Reserve and rising crude oil prices weighed on the rupee.
- Turkish lira fallout.
- Rupee historically depreciates by 10-12 percent on an average in the year ahead of a general election in India.
Gupta expects more pressure from the trade war and the Turkish turmoil. The current account deficit, he said, will be around 2.9 percent for the next 12 months. “As we approach local elections in India, the pressure on rupee can sustain and increase.”
The easiest thing that can be done on the policy side, he said, is reopening the buyers’ credit channel for local corporates.