India Rupee will fall to record low of 56 against the US Dollar: UBS
The Indian Rupee (INR) is poised to fall to a record low of 56 against the US Dollar (USD), UBS stated in a report. USD/INR is now trading at around 52.India's widening trade deficit is hurting the economy while the government's policy paralysis sems to have reached a crisis point. "In these conditions, there is very little policy easing. So companies and government must now become more efficient if they want to retain/induce that extra dollar from overseas”
The Indian Rupee has been constantly weakening against the Dollar since last August, rising from the lows of 44 to currently hover around 52. India's trade deficit for the fiscal year 2011/2012 had widened after record purchases of oil and gold.
This constant expansion seems to be worrying investors that the country may not be going in the right direction and this is believed to be reflecting in the currency exchange rates. Also the overall strengthening of the USD only adds to the pressure.
- Umesh Shanmugam