Re unlikely to fall further this week: Experts

After touching an 11-month low of 56.50 per dollar, rupee is unlikely to weaken further and may trade in 56-level this week, experts said.

“Last week, the depreciation of rupee had come in the wake up strengthening of dollar against all major currencies. Also, domestic factors like high current account deficit (CAD), GDP numbers and demand for dollars for defence buying and oil importers contributed to it, ” General Manager of state-run Corporation Bank who looks after treasury operations, P Paramasivam said.

He added, “However, as some of these negatives are likely to be absent going ahead, rupee is likely to claw back to 56 level.”  Taking cues from the massive fall in equities, rupee declined by 12 paise to end at 11-month low of 56.50 against the US dollar on Friday amid worries over India’s current account deficit and GDP growth, which hit a decade low of 5 per cent in 2012-13. Last month, the Indian unit witnessed its worst decline (4.8 per cent) in the last 12 months.

“Further depreciation of rupee from 56.50 level seems to be little remote next week. However, the situation is little dicey to predict future movement,” Chief Currency Strategist at Geojit Comtrade, Hemal Doshi, said, and added that if the rupee breaches 56.40 level next week, then it could appreciate in the near term.