Rupee to fall to record low over coming year
The rupee is expected to fall further against the US dollar this year to a record low, hit by rising global bond yields and an economic blow from New Delhi's dramatic currency crackdown launched two months ago, a Reuters poll found.
The rupee performed a bit better than most of its regional peers in 2016, weakening just over 2 percent as India's economy, the fastest-growing in Asia, roared ahead for most of the year.
But capital outflows intensified toward the end of 2016 after Donald Trump won the US presidential election and Indian Prime Minister Narendra Modi announced the end of high-value bank notes.
The rupee is forecast to weaken to 68.50 a dollar in one month versus 67.73 at Thursday's close, the poll of nearly 30 foreign exchange strategists carried out this week showed. It is expected to fall further to 69.50 by year-end. That 12-month consensus is the weakest for several years and would mark a record low. Just three months back the view in a Reuters poll was for the rupee to trade at 67.73 in a year.
"We see a less rosy scenario in the capital account and current account front in the coming two years, with global bond yields and money flowing back to the US," said Bhupesh Bameta, head of FX research at Edelweiss Financial Services in Mumbai.
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