India's battered rupee is expected to stay that way for a while, trading near recent record lows over the coming year even as the Reserve Bank of India is forecast to raise rates in December and once more in 2019, Reuters polling found.
The rupee has hit repeated record lows against the dollar this year in its worst run since the financial crisis. It is down over 16 percent so far this year, tracking a deep selloff in emerging markets driven by a resurgent dollar and the ongoing US-China trade war.
While just two weeks ago a majority of economists polled by Reuters predicted the Reserve Bank of India (RBI) would hike interest rates on October 5, the central bank surprised by keeping its policy unchanged and said it was not targeting any currency level.
After that decision the rupee fell to a record low of 74.25 against the dollar. On Tuesday, the partially-convertible Indian currency hit a fresh low of 74.395 per dollar. The latest Reuters poll of over 50 currency strategists taken October 5-9 showed the rupee was seen trading around the current rate, about 74 per dollar, in three months and strengthening just a bit to around 73 per dollar in a year.
The weakest forecast across was 78.0 while the strongest rupee outlook was 67.97 compared to 75.6 and 66.1, respectively, in the previous month poll. But in a year, the rupee's expected performance is broadly in line with expectations for most currencies as the dollar's resurgence is predicted to fade. A majority, 27 of 48 analysts, said the risks were skewed more towards the rupee strengthening against the greenback over the next year.