HSBC Global Research revises Re forecast to 66

 HSBC Global Research has revised its forecast for the Indian Rupee (INR) higher against the dollar to 66.

“The trend for USD-INR is still upwards. While the INR remains supported by some positive features, they are not enough to prevent it from weakening against the USD. We revise our year-end forecast slightly higher to 66, from 63.50,” HSBC Global Research said in a note recently.

According to HSBC, positive factors that had supported investment sentiment and the INR are still largely intact.

“The current account deficit for both FY2015 (i.e. ending March 2015) and FY 2016 will likely be at its narrowest since FY 2007, even if oil prices continue to rise moderately from here,” HSBC said.

Also, Modi’s economic reforms are still coming through — for example, the Goods and Service Tax (GST) Bill has been passed by the lower house of parliament and is now pending approval in the upper house and by the states. But these factors are unlikely to be enough to prevent the currency from weakening further versus the USD, HSBC added.
HSBC also believes that RBI is unlikely to change its forex policy going forward.