DH Poll: Most analysts see Rupee around 71 by March

The rupee is expected to close around 71 against US dollar, by the end of current fiscal, a DH poll showed.

A majority of analysts tracking the money market are of the opinion that the rupee will stabilise around 71 against the greenback, depending on the movement of crude oil prices in the international markets. During the last quarter, the analysts polled by DH had predicted the Indian currency to hover around 73-74 against the dollar.

According to the latest poll of 15 analysts, conducted on Monday, 40%, or six analysts, have pegged the lower range of rupee value at 71 against the US Dollar. Crisil, Care Ratings, and Icra are among those polled.

Another 26.7%, or four analysts, are of the opinion that the rupee will be flat for the next three months and stay in the range of 71-72 against the dollar.

“We believe rupee to stay around this strengthened level and average 71 per dollar by March 2019. This is our base case, with a 50% probability of occurrence. Easing crude oil prices, waivers on US sanctions for India’s oil imports from Iran, and currency swap deal with Japan will continue to support the rupee,” according to the rating agency Crisil.

However, there is a 15% probability of the rupee settling at 74/$, and a 35% probability of it appreciating to our previous forecast of 68.5/$, it says.

On the other hand, Care Ratings, which had earlier estimated 71 as the year-end value for the rupee has revised its estimates to 71-72, on the back of global headwinds. “The dollar has strengthened, exports growth has declined and FPI flows could be volatile,” Kavita Chacko, Senior Economist, Care Ratings said.

Icra, on the other hand, is of the opinion that, the rupee would hover around 70-73 band by the end of the current financial year.

Some other analysts are also keeping a close track of the Brexit deal. “Brexit could be a good turning point. If it doesn’t turn out the way it should you would see a lot of chaos in the global markets,” according to Madhavi Arora, Economist at Edelweiss.

On the other hand, a global investment bank, UBS, is of the opinion that a lot depends on the Brent crude prices since India is a net oil importer with inelastic demand. “If the current trend of lower oil prices ($60/bbl) lasts through March 2019, we estimate rupee could trade around 69-72 range by end of March 2019,” it said.

The rupee has fallen sharply against the US dollar this fiscal, losing over 9% so far (April to November), as global headwinds multiplied and the current account deficit (CAD) widened. It is also one of the worst performing currencies in the emerging markets basket.

On Monday, rupee stabilised 34 paise against the greenback, to close at 71.56.