The beleaguered rupee, which has pared back losses after breaching the 65 mark against the U.S. dollar last week, will head back to 60 in the coming months, according to Crisil, the Indian arm of global ratings agency S&P.
Crisil expects the currency to recover to this level by the end of fiscal year ending March 2014, helped by further narrowing of the current account deficit due to a decline in non-oil imports, including gold, the agency said in a recent note.
The rupee has been heavily hit amid growing concerns around the Federal Reserve scaling back its monetary stimulus, falling over 15 percent against the U.S. dollar in the past three months. Rapid depreciation in the currency prompted some strategists to forecast that it would fall as low as 70.
Crisil forecasts the country’s current account deficit will narrow to 3.9 percent of gross domestic product in the current fiscal year – lower than an earlier estimate of 4.2 percent – compared with 4.8 percent last year.
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