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“The main two factors that could weaken the rupee are mainly on deteriorating trade and capital flow dynamics,” Parul Mittal Sinha, India’s head of financial markets, said in an interview with Bloomberg TV on Tuesday. View of the trading desk of the bank. She said the currency could extend its decline to 82 per dollar in the next three months.
of India
trade deficit Last month widened to the widest on record as higher global commodity prices further pushed up import costs, data showed on Monday. With an outflow of about $29 billion from the stock market, further pressure on the rupee will increase when rates rise. federal Reserve Increasing flows from emerging markets to the US.
bloombergIndia’s current account deficit – the biggest measure of trade – could rise to 3% of GDP in the fiscal year ending March 31, Sinha said, almost double the level seen in the previous year.
He said that depending on the actual effective exchange rate, there is scope for further depreciation in the rupee. reserve Bank of Indiaof 40-currency
real effective exchange rate It was at 104.90 in May, with a value above the 100 signaling overvaluation.
“If you look at the valuation of the rupee on REER basis, we see scope for further improvement as the rupee is currently trading above average historical levels,” Sinha said. “We see a further 2% correction in rupee levels or depreciation from current levels.”
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