July 3, 2012
Rating agency Crisil Ltd sees a high probability of the rupee touching 50 a dollar by March 2013. The current level of the domestic currency closed at 55.43 to a dollar on Monday.
July 3, 2012
Rating agency Crisil Ltd sees a high probability of the rupee touching 50 a dollar by March 2013. The current level of the domestic currency closed at 55.43 to a dollar on Monday.
The rupee slipped to its lifetime low 57.12 to a dollar on 22 June.Crisil, the Indian arm of Standard and Poor’s (S&P), assigned a two-out-of-three chances of the rupee hitting this level, and a one-third chance to it consolidating around the present level of 55-57 a dollar.
While Crisil’s view is a contrarian one; most analysts do not expect the rupee to strengthen as much. The consensus view is of gradual appreciation but not to the 50 level.The Indian currency is the worst performing currency in Asia, depreciating about 21% in the past year. It has depreciated rapidly since August 2011 when the US was downgraded by S&P, leading to widespread risk aversion of global investors who started hoarding safe-haven dollar assets.
This led to the greenback rallying against all global currencies. The Reserve Bank of India (RBI) introduced a series of steps to rein in the currency’s loss, including curbing banks’ abilities to speculate in the currency market. The central bank has sold at least $20 billion to stabilize the currency. Despite that, the rupee has continued to depreciate.
Courtesy: ET
