Rupee may come under pressure as economy shows signs of stress: Experts

Rupee has already lost little more than 2% against the dollar since the beginning of the year

Pressure is building up on rupee as domestic economy shows signs of stress at a time when the US economy is on its path to recovery. 

The recent ban on buyer’s credit instruments such as letters of undertaking (LoUs) is also expected to put pressure on the exchange rate in about a month’s time. Already before the recent ban by the Reserve Bank of India (RBI), banks had gone slow on issuing the instruments. But now, currency market observers say, importers could be crowding the market with a dollar demand of about $10-12 billion, and this should weaken rupee.

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