INSUBCONTINENT EXCLUSIVE:
The rupee is forecast to trade at 75.55 and 76.00 per dollar by the end of April and mid-yearBengaluru: The rupee will probably cut some of
its losses against the dollar in the next year, according to strategists polled by news agency Reuters, but it's likely to stay weak with
other emerging-market currencies until the coronavirus pandemic subsides.The rupee's path will largely depend on how successful the
government's steps are in containing the spread of COVID-19 in a country of more than 1.3 billion people, the second-most-populous in the
world.Prime Minister Narendra Modi has ordered a 21-day national lockdown, which began on March 25
But the government's fiscal response so far has been modest compared with other countries: Rs 1.7 lakh crore ($22.3 billion) in direct cash
transfers and food security measures."There is further INR weakness in store before it eventually stabilizes as global calm returns once
(the) COVID-19 impact peaks and global coordinated policy measures start to kick into growth, which is at a multi-year low in India," said
Madhavi Arora, lead economist, FX and rates at Edelweiss Securities.After giving up over 7 per cent since the start of the year, the rupee
fell to a record low of 76.42 to the dollar on March 25.The Reuters poll of market strategists and analysts taken March 30-April 2 predicted
the rupee would strengthen 3.1 per cent to 74.00 per US dollar in a year from 76.39 on Thursday, based on the median forecast
strategists, who forecast EM currencies would make up some lost ground
Most expect the US dollar's strength to remain intact over the next three months.The rupee is forecast to trade at 75.55 and 76.00 per
dollar by the end of April and mid-year, respectively
Those forecasts were also in a relatively wide range, 72.45 to 79.00.Of the 39 respondents polled, 17 still expected the rupee to depreciate
beyond its recent record low at some point over the next year
That may be partly because India's economy was already slowing before the coronavirus spread into a global pandemic.It grew just 4.7 per
cent in the three months to the end of December from a year earlier, the slowest expansion in over six years
Growth is forecast to slow to 4 per cent in the quarter just ended and then to half that rate, 2 per cent, in the current one.The Reserve
Bank of India cut interest rates on March 27 by 75 basis points, its biggest cut since 2009, during the global financial crisis, to 4.40 per
That followed 135 basis points of cuts in 2019.In addition, the RBI announced targeted long-term refinancing operations to ensure market
liquidity.Some strategists said the RBI's interventions prevented the rupee from falling further."The RBI may continue to step in to prevent
excessive INR depreciation but is unlikely to alter the currency's inherent trend immediately
We will end up flowing with the emerging-markets space in the current mayhem," said Edelweiss Securities' Ms Arora.($1 = Rs 76.3990)
