Rupee may touch 62 in a year, predicts Credit Suisse

New Delhi: The rupee, which has depreciated by nearly 10 per cent in the last few months, is likely to weaken further and may touch 61.50/USD in next three months and 62/USD in the next 12 months, Credit Suisse said.

Credit Suisse forex strategists are currently expecting the rupee to fall to 61.5 against the dollar in the next three months and reach 62 this time next year.

Keeping in view the recent developments in rupee, Credit Suisse said that chances of the RBI cutting rates at July 30 meeting are close to "zero", but on the reverse if the rupee continues to plunge further rate hikes will come onto the agenda.



"The depreciation of the rupee means the chance of the RBI cutting interest rates at its next meeting on July 30 is virtually zero, and indeed there is probably a higher risk of rate hikes not cuts right now, given Subbarao's hawkish nature," Credit Suisse said in a research note.

The rupee last week sank to an all-time low of 60.72 against dollar on heavy capital outflows and month-end dollar demand from importers.

After a period of relative stability from mid-2012, the Indian rupee began to lurch higher (depreciate) against the US dollar from early May. Since then it has lost more than 11 per cent of its value.

With regards to inflation, Credit Suisse said if the rupee were to stabilise at the current level, WPI inflation will be boosted by 50 to 75 basis points taking into account the softening in USD-denominated commodity prices to date.

The report, however, ruled out a repeat of the 1991 balance of payment (BOP) crisis as "premature".

"The country's forex reserves (which cover around six months of imports and are nearly three times the size of short term external debt) also buys the country plenty of time," Credit Suisse said.


Updated Date: Dec 20, 2014 19:54 PM

Also Watch

Watch: Firstpost test rides the new Thunderbird 500X in Goa and walks you through the Royal Enfield Garage Cafe
  • Tuesday, April 17, 2018 Varun Dhawan on Shoojit Sircar's October, 5-star reviews and working with Anushka Sharma in Sui Dhaaga
  • Saturday, April 14, 2018 Ambedkar Jayanti: Re-visiting Babasaheb's ideals exposes fake Dalit politics of Rahul Gandhi and Congress
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See