JOIN USThe rupee is likely to rally to 59 in the short-term on narrowing current account deficit, higher inflows from foreign investors and easing inflation, Barclays said in a report.
The report also said there could be a pre-poll rally in all asset classes in the country as investors expect a pro-market BJP to come to power. The rupee closed nine paise down or 0.15 per cent at 60.94 against the US dollar on Tuesday. On Monday, it ended at a seven-month high of 60.85.
“We think recent positive rupee momentum, on the back of a narrowing current account deficit, softer inflation prints, enhanced policy credibility and strong capital inflows, will continue in the near-term,” Barclays said.
It has revised its one-month dollar/rupee forecast to 59 from 61, and current account deficit estimates to $38 billion, or 2.1 per cent of GDP, for 2013-14.