Care Ratings expects Rupee to hover in a range of 60-62 for rest of the year

Care Ratings observed that the exchange rate movement largely depends on the sentiments

Care Rating in a research report has highlighted that stability in the Rupee would persist with a broad range of Rs 60-62 / $ to prevail. Presently the rupee is in the region of Rs 61/$, while Care Rating expects that the Rupee can weaken towards December when FIIs could book their profits.

Care Ratings observed that the exchange rate movement largely depends on the sentiments, which is guided by the FII flows and the forex reserves. There have been net accruals to the forex reserves of $ 17.6 bn (as of 12th September 2014) which is a positive for the economy as the rupee has been stable.

Care Ratings believe that any sharp strengthening of the rupee below Rs 60/ $ into the fifties will prompt purchase of dollars by the RBI to stabilize the rupee. Similarly, weakening beyond Rs 62 could have the RBI moving in to stabilize the rupee.

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