Rupee to hit 56 in a month,govt needs to deliver on fiscal front: experts

Barclays Capital expects spot rupee to hit 56 in one month and then subsequently rise only to 54 within three months; the USD/INR is currently at 54.85.

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BarCap cites “high” sensitivity to global market sentiment, “limited” appetite for the RBI intervention and “weak” macro fundamentals, in a reported dated May 17.The rupee will gain to 48/dollar in one year, BarCap also forecasts.

MeanwhileRajeev Malik of CLSA feels that it is pure risk-off dollar strength that is playing out. The global risk off angle may force the rupee to see further downside despite RBI measures coming through, he told CNBC-TV18 in an interview.

He added thatRBI will not have much room to ease unless the government can actually deliver meaningfully on the fiscal front.

Traders say 55 is the next key psychological resistance, breaching it could spark deep concerns.Global risk aversion is weighing heavily on the rupee; local shares aredown 1.2 percent.

Agencies