Mizuho’s Varathan Says India’s Rupee to Drop 2.9 Percent by May

Vishnu Varathan, an economist at Mizuho Corporate Bank Ltd. in Singapore, comments on the outlook for India’s rupee.

The rupee fell 0.7 percent to 49.5075 per dollar in Mumbai yesterday, taking this week’s decline to 1.6 percent, according to data compiled by Bloomberg. Three-month non-deliverable forwards for the currency gained 0.1 percent to 50.47 as of 8:20 a.m. in Mumbai.

“In May, the rate is going to be at 51 perhaps. First of all, euro-zone risks will come back and oil prices will be higher, putting pressure on the fiscal deficit and on the current account.

“The rupee has gained quite a bit against the dollar in most of January and part of February. That was in line with our medium-term expectation that the rupee will make some ground. For the next one month we see the rupee firm.”

To contact the reporter responsible for this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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