Brazil's real and India's rupee should hold firm into 2010 as investors look to emerging markets for growth instead of developed economies, a Reuters poll of BRIC nations' currencies showed on Thursday. Brazil's currency, the real, is expected to fluctuate in a narrow range and trade at 1.76 per dollar, near current levels, a year from now, according to the median of around 50 forecasts taken for that currency.
The Indian rupee will end the 12-month period at 45.3 per dollar, compared with a little over 46 to the dollar currently, according to the median of around 40 forecasts. The poll of more than 100 foreign exchange strategists across the BRIC leading emerging markets - Brazil, Russia, India and China - as well as the United States and Europe also foresaw a modestly stronger Chinese yuan but a weaker Russian rouble.
Emerging economies, particularly those in Asia and Latin America, have led the way in the recovery from the worst financial and economic crisis among rich nations in 80 years. The BRIC nations have been claiming more clout globally since the crisis, which has weakened the dominant influence of developed economies.
Brazil, Latin America's largest economy, expanded by 1.9 percent in the second quarter compared with the first three months of the year. It has also staged two of the three largest initial public offerings in the world in 2009. Over the same period, and the currency received an additional boost last week when the country was selected to host the 2016 Olympic Games. Many Brazilian companies are tied to trade in raw materials and the Chinese have been active buyers of commodities there.
RUPEE RISING The partially convertible Indian rupee has strengthened to its highest level in more than a year, recovering 13 percent from a record low of 52.2 per dollar touched in early March. It has risen more than 5 percent so far in 2009.
ROUBLE, YUAN Russia's rouble has been strengthening rapidly in recent weeks, both against the dollar and the euro-dollar basket that the central bank uses to guide its foreign exchange policy.
China's yuan could stay stable "until exports start rising strongly again in year over year terms and deflation fears end," according to Neil Shearing of consultancy Capital Economics in London. China's central bank has kept the yuan almost flat against the dollar since July 2008, when the global financial crisis began worsening. It was forecast at 6.83 per dollar in one month, 6.82 in three months and 6.75 in a year's time.
China has repeatedly declared it is in the process of reforming its exchange rate system to allow the yuan to move more flexibly, but that it will not allow moves that could destabilise its economy.
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