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| Rupee may rise to 46/$ in 12 months: Goldman Sachs |
| Press Trust of India / New Delhi May 25, 2009, 14:33 IST |
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Rupee is likely to appreciate to 46 a dollar in the backdrop of a stable government at the centre and relatively resilient domestic demand, says a report by global financial services giant Goldman Sachs.
"We expect the INR to appreciate further from current levels as the stable government and relatively resilient domestic demand become key catalysts for foreign inflows," the report said, adding that the Indian currency "may touch Rs 46 to a dollar within 12 months".
Noting that there are significant pressures for rupee appreciation, the report said that the Indian currency gained about 5 per cent against dollar since the victory for the Congress-led UPA in the general elections.
With the rupee strengthening, it said the sectors dependent on imports will gain, the exports will be hit.
"Oil distribution, fertiliser and capital goods companies are amongst the largest importers and are likely to benefit from a stronger INR. On the other hand, IT, textiles, pharmaceutical, and export-oriented oil refining are likely to be hit by a strong INR," the report added.
At the Interbank Foreign Exchange (Forex) market today, the local currency, which had gained nearly 4.9 per cent during the last week, turned weak falling to 47.32 a dollar.
On Friday, the domestic currency had ended 27 paise higher at 47.10/12 against the greenback. Last week, another global financial services major Morgan Stanley had said the Indian rupee could strengthen to Rs 46 against the US dollar in the days to come as the decisive mandate would lead to higher growth, more reforms and prudent fiscal policy.
"The new administration raises the prospect of a stronger growth outlook, economic reforms and a more prudent fiscal policy. We therefore change our $/INR year-end target to 46 from 53," Morgan Stanley had said in a report.
Having appreciated during the last six trading sessions, rupee today declined by 22 paise to 47.32 a dollar in early trade on expectations of fresh capital outflow by foreign funds.
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