Rupee seen touching 51.50 against $ by March

The government’s recent reform measures will boost capital inflows which will propel the rupee to rise up to Rs 51.5 against the dollar by end of the current fiscal, according to Centre for Monitoring Indian Economy (CMIE).

“We expect the rupee to continue to strengthen in the second half due to strong capital inflows. It is expected to reach Rs 51.5 to the dollar by March,” the economic think-tank said in a note.

The Indian unit has been very volatile since August last year and moving either ways very rapidly. It is currently pegged at Rs 53.63 to the US currency. However, the past two weeks have not been so good for the rupee, which has slipped below the Rs 53 levels.

The CMIE said the rupee gained 5.2 per cent within 10 days of the announcement of the reform measures and moved up to touch Rs 51.80 levels because of the increase in inflows.

In the fortnight to September 28, after the reform measures were announced on September 14, foreign institutional investors pumped in US$3.7 billion into the country.