Rupee may stabilise at 73-74 level: DH poll

The rupee is expected to stabilise in the range of 73-74 against US dollar, according to a poll conducted by DH among analysts and economists on Thursday.

The poll was conducted among 14 analysts tracking the rupee movement and economists covering the macro economy. Although many believe that the rupee might momentarily touch 75 against the dollar, a majority of them opine that it could settle below 74.

They also said the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting on Friday might announce measures to prevent its slide further.

“A lot depends on Brent crude prices. In case crude prices stay over $85, then we are in serious trouble,” according to noted economist Govinda Rao.

Global advisory firm UBS has pegged its year-end value of the rupee at 73, while Aditi Nayar, Principal Economist, ICRA, also believes that the rupee will stabilise in the 72-73 range. Sharekhan by BNP Paribas said the rupee will settle in the range of Rs 73-75, and it would be around 74 till the end of March next year.

On Thursday, the rupee crashed to a historic low of 73.81 to the dollar intraday. Experts believe that the RBI would go for a 25 basis points hike which would help the rupee stabilise and hover around the 72-73 range.

For the rupee to stabilise, either oil has to fall or the fund flow which is moving away from emerging markets (EMs) towards the US, should reverse. Short of these things happening, volatility can continue to be high in the rupee for the rest of the year, said Anindya Banerjee, deputy vice president, Kotak Securities.

“In case oil prices do not fall and fund flows continue to head to the US over EMs, USD/INR can head towards 76/77 levels on spot by the year-end. At the same time, if we see a reversal of flows or a sharp fall in oil prices, the rupee can retrace the losses and settle around 71 by the year-end,” Banerjee said.

He added that the base case for the rupee will remain between 74 and 75 levels by December-end.

Prathamesh Mallya (Chief Analyst, Non-Agro Commodities & Currency) of Angel Broking said that rupee will stabilise at 74.5 and it could regain the 69-mark against the dollar by the end of this year and hover around the 68 and 70 range by March 31, 2019.

ICICI Direct opined that the rupee will stabilise between 74 and 75, and will remain in the range of 71-72 till the end of March next year.