The rupee is likely to remain under pressure and is expected to trade in the range of around 67.70 - 67.90 per dollar this month, says a report.
According to Dun & Bradstreet, foreign capital flows might get affected largely owing to low productivity in the Winter session of Parliament and ambiguity over implementation of GST.
Besides these factors, "the uncertainly around global economy, OPEC's decision to cut oil production and hawkish stance by Fed would exert downward pressure on rupee," said Arun Singh, Lead Economist, Dun & Bradstreet India.
D&B expects the rupee to trade in the range of around 67.70 - 67.90 per USD during December 2016.
The report further noted that the upside risk to inflationary pressures, volatility in the rupee and rise in global oil prices are likely to add concerns to already heightened uncertainty around recovery process of the Indian economy. Moreover, investment demand has contracted and industrial activity also remains in "doldrums".
"Adding to that, the demand shock to the economy owing to demonetisation across sectors with high cash transactions and across industrial supply chains is likely to affect India's growth momentum in the near term, as we expect the greater benefits of demonetisation to unfold in the medium to long term," Singh said.
He further noted that while the government has taken various initiatives to push for cash-less transactions, if the Reserve Bank of India is not able to supply adequate new banknotes in the immediate term, the impact would be prolonged.
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