The Indian rupee hit a historic low of 88.33 against the dollar this week. However, according to a Reuters survey of currency strategists, sharper declines are not expected in the near term.
The rupee’s depreciation this year has been approximately 3%, making it Asia’s weakest currency.
The main reason for the pressure is the 50% high tariffs imposed by the US on Indian goods and the $15 billion outflow of foreign capital.According to analysts, the Reserve Bank of India is intervening in the market using its $690 billion reserves and aims to prevent sudden panic selling.
However, despite strong 7.8% economic growth, the pressure of weakness on the rupee continues.According to the survey results:
- Levels of 88.04 are expected at the end of September, and 87.75 in November.
- The probability of a decline to the 89-90 band within 12 months is increasing.
- Some experts predict that the 90.30 level could be seen.
Experts say, “Rupee depreciation is the norm, one-way appreciations are not permanent.” High tariffs and uncertainties in foreign trade make the future of the currency uncertain.
