You are here: Home » PTI Stories » National » News
Business Standard

Credit Suisse cautious on rupee; retains 12-month forecast at Rs 70/USD

Press Trust of India  |  New Delhi 

The weakness in is expected to continue further and the domestic could touch 70 per US dollar if crude continue moving upward, says a report.

According to the global major, remains vulnerable to unexpected USD strength against the G10 currencies and the Chinese Yuan (CNY).

The G10 currencies are the United States dollar, the British pound sterling, the euro, the Japanese yen, the Australian dollar, the Swiss franc, the New Zealand dollar, the Swedish krona, the Canadian dollar, and the Norwegian krone.

"As downside risks remain, the USD/INR could head toward 70 unless we get some relief from and the current USD strength. We maintain our negative stance on the currency, and our USD/INR forecasts stand at 70 for both 3 and 12 months," said in a research note.

The hit a fresh two-week low of 68.93 against the USD in early session today.

In the near term, the INR could remain well supported following the back-to-back two rate hikes by the (RBI). Moreover, abating foreign portfolio investor (FPI) outflows could contain weakness to some extent, the report noted.

"Given our concerns over weak trade balances and little headroom for government spending ahead of the general elections, we remain cautious on the rupee and maintain our 12-month forecast of 70 against the USD," the report said.

The rupee has been among the worst-performing currencies against the dollar compared with its peers so far this year and breached the 69-mark against the US dollar amid global uncertainties and concerns over inflation.

According to Credit Suisse, though the Reserve Bank is not likely to go for another rate hike this year, but if rupee continues to depreciate to around 70 against the USD, "it is likely that the RBI may try to arrest weakness in the rupee with another rate hike", it said.

In August 1, the six-member (MPC) headed by RBI for the second time in two months raised interest rate by 0.25 per cent on inflationary concerns.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, August 07 2018. 11:30 IST