Published: November 8, 2023 2:04 pm
Author: RT
The forecast comes despite the country’s soaring economic growth
The Indian rupee is expected to trade close to record lows against the US dollar in the coming months as the Reserve Bank of India (RBI) would likely intervene less next year to prop up the national currency, Reuters reported on Wednesday.
Earlier this month the rupee hit a record low of 83.29 against the greenback, which stood in contrast to a projected 6.3% expansion of the Indian economy that would make it the fastest-growing in the developing world, the report pointed out.
According to Reuters’ poll of foreign-exchange analysts taken between November 3 and 7, the Indian currency would trade around its current level of 83.25 against the dollar in a month, strengthening slightly to 83 against the greenback in three months.
However, over 30% of economists surveyed are less optimistic, forecasting the rupee to reach a new low by the end of January.
“We’re not expecting it to rally as strongly as some of the other currencies that would be more freely-floating… because it’s already stronger than perhaps fundamentally it would have been,” said Robert Carnell, regional head of research, Asia Pacific at consultancy ING.
READ MORE: India to scale back state investment – Goldman Sachs
About 70% of strategists expect intervention by the RBI to decrease next year.
“With a reversal of capital flows next year, the RBI’s intervention in the currency market should reduce,” said Suman Chowdhury, chief economist at Acuité Ratings and Research.
India’s central bank sold about $23 billion in forex reserves over the last four months in a bid to support the rupee.
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