Goldman Sachs cut its three- and six-month forecasts for the Indian rupee to 58 per dollar each,citing the sell-off in emerging market currencies and the country’s relatively high current account deficit levels.
Goldman had previously forecast the rupee would hit 55 in three months and 53 in six months against the dollar. The investment bank has also revised its 12-month forecast to 56 per dollar from 52 earlier.
The rupee has declined sharply since the start of May,hitting a record low of 58.98 on Tuesday.
“In the near term,risks to the INR remain elevated due to market concerns about rising US bond yields and their potential negative impact on capital flows to current account deficit EMs (emerging markets),” the note said.
At 9:45 a.m.,the partially convertible rupee was trading at 57.73/74 per dollar versus Thursday’s close of 57.98/99.