CIMB’s Ramanathan Says Rupee May Fall to 54 Amid Slowing Growth
Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur, comments on the outlook for the Indian rupee. He spoke in a telephone interview.
The rupee declined 1.6 percent to 52.1450 per dollar yesterday in Mumbai, according to data compiled by Bloomberg. It touched 52.1550 earlier, the weakest level since a record low of 52.18 reached in March, 2009.
“It looks like the record low will be breached. We see the rupee’s peak at 54 to a dollar, which was our forecast for the second quarter of 2012, but we could reach this sooner if buying interest continues in the dollar.
‘‘The transatlantic uncertainty is inducing a lot of Asian players to buy the dollar.
‘‘The rupee itself is being pressured by three factors. India’s large fiscal deficit is a negative, growth is slowing down but the RBI is not giving any indication of trying to ease monetary policy, plus there is a lot of dollar-buying interest from importers as well as hedges in the offshore non-deliverable segment.’’
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