homevideos Newsmarket Newscurrency NewsRupee to touch 73 against dollar by the end of 2018, 74 by mid 2019: HSBC
Rupee to touch 73 against dollar by the end of 2018, 74 by mid-2019: HSBC
The Indian rupee is expected to touch 73 per US dollar by the end of calendar year 2018 and 74 by mid-2019, said Pranjul Bhandari, chief India economist of HSBC.
The measures announced by the government on Friday to defend the rupee fall and curb the widening current account deficit (CAD) failed to bring any respite on Monday. The currency weakened against the US dollar to touch a low of 72.67.
“Our forex strategists- they are calling for 73 per dollar by the end of the year and 74 per dollar by the middle of the next year for now," said Bhandari.
“I think the weakness today is not just India specific, it is across currencies. So I wouldn’t put it on what was announced on Friday night and I think it is also important to put what was announced on Friday in context. I think it was a good first steps in the sense that it gave a signal to the market that the government and the Reserve Bank of India (RBI) are together looking at all of this and taking coordinated decisions on many fronts," she added.
Talking about RBI's measures, Bhandari said, “Two things the RBI can do. Number one is raise the repo rate and I don’t see any reason for a pre-policy rate hike. So we haven’t seen the end of that, we have a policy-meeting coming up and the other is forex intervention. They did intervene heavily for a long time, right now, they have softened their stance because they also need to make sure that they have enough foreign exchange reserves in their arsenal."
“We are expecting 50 basis points (bps) in rate hikes in Q4 split between October and December,” she mentioned.
First Published: Sept 17, 2018 12:56 PM IST
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