Home Business Rupee may fall to 84-85 per dollar by March on trade deficit:...

Rupee may fall to 84-85 per dollar by March on trade deficit: Report

Mumbai:

In a note on Monday, Elara Global Research said, rising crude oil prices, high trade deficit and dwindling forex reserves could lead the Indian rupee to fall to $84-85 by March, when the currency hit a record low of 82.6825. .

“So far, the rupee is bearing the brunt of aggressive global tightness, as a hawkish (US) Federal Reserve and interest rate differentials weigh on its outlook,” said Garima Kapoor, an economist at Elara.

“High trade deficit print and the recent surge in crude oil prices added to the near-term headwinds.”

Kapoor expects the rupee to fall to $83.50 per US dollar by December, while it will fall further to 84-85 by March.

The rupee on Monday extended its recent fall to a record low of 82.6825 following US jobs report.

Higher-than-expected job growth in September and an unexpected fall in the unemployment rate led to a further 75 basis points Fed rate hike next month, putting pressure on the rupee.

Rising oil prices added to the challenges. Brent crude jumped more than 11% last week after OPEC announced its biggest supply cut since 2020, despite concerns that it could lead to a recession.

Brent crude was trading near a six-week high at $97.04.

“A negative move by OPEC may keep oil prices firmly in the range of $90-100 per barrel,” Kapoor said.

Meanwhile, India’s foreign exchange reserves stood at $532.66 billion at the end of September, the lowest since July 2020. That’s a drop of about 16% from $633.6 billion at the start of the year.

Kapoor said the decline is the biggest among emerging market competitors.

Kapoor said the risk of the rupee falling to 84-85 stem from a premature Fed pivot and higher oil supplies from Iran or Venezuela, though he added that both were less likely events.

“Another risk could be from the possible scheme by RBI to raise foreign capital through NRI (Non-Resident Indian) bonds,” she said.

“An outcome is possible if the import cover is conclusively reduced by seven months (from about nine months now).”

(Reporting by Nimesh Vora; Editing by Savio D’Souza)

RELATED ARTICLES

Rupee rises 13 paise to 81.59 against dollar

<!-- -->The rupee appreciated 13 paise to 81.59 against the dollar in early trade.The rupee appreciated 3 paise to 81.59 against the US dollar...

Nifty rises 61.5 points to 18,679.55 in early trade

<!-- -->Indian stock indices were largely flat in the opening session. (File)Indian stock indices remained largely flat on Wednesday morning and remained at...

RBI set to launch retail digital rupee pilot: 10 points

<!-- -->However, retail digital rupees can be converted into deposits with banks earning interest. (file)New Delhi: Users can transact through digital wallets; ...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

The bloody game of TTP terrorists starts in Pakistan as soon as Aseem Munir arrives! Suicide blast in Quetta, two dead, 24 injured

Islamabad : The threat of Tehreek-e-Taliban Pakistan is once again hovering over Pakistan. The news is coming that there has been a bomb...

“Forgive Me Shoaib”: Pakistan Star Recalls Andrew Flintoff’s Reply After Facing His Bouncers | cricket news

File photo of Shoaib Akhtar© YoutubeEngland will play their first Test match in Pakistan in 17 years when the first Test of a three-match...

Six Chinese astronauts gather for the first time in the space station

China Shenzhou-15: Three astronauts aboard a spacecraft arriving at China's under-construction space station today (November 30) met their three colleagues present there. With...

Diabetes: Prevention and Diet Management Strategy by our Consultant Nutritionist

Diabetes is a condition in which the body's glucose metabolism gets out of sync. Normally, food is digested and glucose is released into...

Recent Comments