India's Rupee Seen Sliding to 100 per Dollar as RBI Measures Only Slow Pressure
Updated
Updated · CNBC · Oct 16
India's Rupee Seen Sliding to 100 per Dollar as RBI Measures Only Slow Pressure
3 articles · Updated · CNBC · Oct 16
Summary
Strategists see the rupee weakening again after its rebound to the 95-per-dollar level, with S&P projecting 97 by end-2026 and 98 by mid-2027 while saying 100 cannot be ruled out.
Fund outflows and a rising energy bill are driving that view, as elevated oil prices, a wider current-account deficit and tougher global capital flows outweigh the Reserve Bank of India's recent support steps.
The RBI on Saturday tightened rules to deter speculative rupee bets and opened a special dollar window for three state oil marketers, measures analysts said should steady the currency only in the short to medium term.
Since the close of its FCNR-B deposit program on Aug. 30, the rupee has fallen 1.9%, reserves have dropped by $51 billion through Oct. 2, and forward dollar commitments have reached $200 billion, according to broker reports.
India imports about 85% of its fuel and has seen foreign investors sell $32.5 billion of equities this year through Oct. 13, leaving the world's fastest-growing major economy exposed to further rupee weakness if oil rises again.