The currency is likely to revive in the second half of 2023 to close the year at 80 to the dollar and rise further to 78 by the end 2024, according to estimates by Capital Economics
The rupee may sink deeper into the red and hit a record low of 85 to a dollar next year as the greenback firms up after a recent round of correction, according to Capital Economics.
“The dollar has stabilised over the past month after its sharp fall in November, and we continue to think that a slowing global economy and worsening risk sentiment will lead to another (possibly final) leg-up in the dollar over the first half of 2023,” Jonas Goltermann, Senior Markets Economist, said in a note.
The dollar will strengthen further against most other currencies over the coming quarters as global growth slows, and risk appetite remains fragile, he added.
The research house pegs the rupee to trade at 83 to the dollar at end of this month and slip further to 84 at the end of March 2023 and then to 85 by June-end.
However, the Indian currency is likely to revive in the second half of 2023 to close the year at 80 to the dollar and rise further to 78 by the end 2024, according to estimates by Capital Economics.
The rupee has been buffeted by financial tightening in the US and financial market volatility that has battered most developed market and emerging market currencies.
The unit has fallen to fresh record lows of 83 to a dollar this year but has done better than most of its peers. Still, slowing global growth and a widening current account deficit could hurt the currency.
The Reserve Bank of India has said that it would continue to act to curb excessive volatility in the exchange rate.
“The story of the Indian rupee is one of resilience and stability and we will continue to act with excessive volatility of exchange rate and orderly evolution of exchange rate,” Reserve Bank of India Governor Shaktikanta Das said earlier in December.
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