Rupee to breach 80-levels by year end: DH poll

The Indian Rupee has been touching new historical lows almost every day in the last few days. On June 30, it rebounded from its all-time low to close 5 paise higher at 78.98 (provisional) against the US dollar.

The average of DH poll of 11 rupee experts suggests the Indian currency will touch 80.66 by the end of this year.

Four analysts said the rupee would even touch 81, while two others said it could touch 81.5.

A QuantEco Research suggests that the rupee has depreciated 3.9% in FY23 so far. “The primary reason for weakness in INR stems from a multitude of global factors, viz., elevated international commodity prices, heightened geopolitical uncertainty, rapidly rising global interest rates, moderation in global demand, etc. At the same time, few domestic factors like support to imports from a gradually recovering domestic economy and recent export restrictions imposed by the government in select commodities could also be playing a secondary role”, QuantEco’s research said.

Ritesh Bhansali, Vice President at Mecklai Financial Services Ltd says that the Indian currency could test 80 against the greenback in the next three months itself and any adverse events could push it down even further. “We are expecting the weakness in rupee to be over by the end of November and rupee is expected to stabilise and even appreciate a bit from December onwards”.

Jigar Trivedi - Research Analyst- Commodities & Currencies Fundamental, Anand Rathi Shares & Stock Brokers feels that though the Reserve Bank of India (RBI) might intervene in the forex markets to curb the losses, it’s unlikely to draw a line in the sand, as fundamentals remain weak. He argued that “Shortage in cash dollars and collapse in 1 year forward premiums have weighed down on Rupee.”

Amit Pabari at CR Forex believes that the there is a huge dollar demand/shortage amid FII outflows.

“Also, the corporates, oil companies and other importers would have settled their liabilities in the last couple of days, and the unwinding of USDINR open interest that happened; together aggravated the demand for dollars and pushed USDINR higher” Pabari said adding that the rupee could touch 80.50 by year end.