DH Poll: Battered rupee likely to extend losing streak

The Indian rupee is unlikely to see reversal of downward trend and trade in the broader range of 72-74 against the US dollar in the near term, a DH poll showed.

Of the 10 economists polled by DH, an overwhelming eight expect the RBI to step in with an emergency rate cut in line with Federal Reserve.

"We must remember that the Reserve Bank of India (RBI) will intervene at some stage," said Madan Sabnavis, Chief Economist, CARE Ratings.

Yet another economist from a global advisory, who didn't wish to be named, said that if RBI doesn't intervene on a timely basis, it will send the economy for the toss.

On Tuesday, the US Federal Reserve announced a surprise 50 basis points cut in the key policy rates. However, the move ended up being counter-productive as risk-averse investors moved away from the equities to government debt and gold. The RBI, on Tuesday, had also hinted at further interest rate cuts and more liquidity measures.

While the analysts said that there is a possibility of rupee crashing to an all-time low, but the probability for it is very little after the RBI's assurance. The lowest that rupee has touched ever has been 74.28 (intraday), on October 5, 2018.

Of the 10 analysts polled by DH, only two expect the rupee to breach 74-mark by end of March. The remaining eight expect the rupee to be range-bound in 72-74, with average coming in at 73.5 -- which would translate into 6.2% annual depreciation against the dollar.

On Wednesday, after a volatile day of trade, the rupee broke its losing streak and closed flat at 73.19 against the US currency.

During the past four trading sessions, the rupee has lost 2.1% or 154 paise against the US dollar, as foreign funds continued to exit from the Indian markets. The FIIs have withdrawn over Rs 7,000 crore over the last three trading sessions and Rs 23,000 crore since January this year.