Barclays pegs Re at 59 on poll push, lower CAD

Barclays pegs Re at 59 on poll push, lower CAD

The 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.

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