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Wednesday, July 15, 2020

Rupee to rise to 45 by end 2009: Barclays

The rupee soared by 4.3 pct to a 5-month peak of 47.27,in three sessions beginning Friday.

Written by Reuters | Mumbai | Published: May 20, 2009 4:27:00 pm

The rupee will rally by 5.7 percent to 45 per dollar by end 2009 from current levels,fuelled by a positive growth outlook due to the election outcome and capital inflows,Barclays Capital said on Wednesday.

The rupee soared by 4.3 percent to a five-month peak of 47.27 on Tuesday,in three sessions beginning Friday,after the ruling coalition’s decisive victory over the weekend heightened expectations of financial sector reforms and privatisation.

At 2:27 p.m,it was at 47.51/52 per dollar.

“The Reserve Bank of India’s exchange rate policy can accomodate significant appreciation as concern shifts to inflation from growth,” Sailesh Jha,senior regional economist at Barclays Capital,said.

Barclays expects growth in 2009/10 and 2010/11 at 5.5 percent and 6 percent respectively “with the risks tilted to the upside by around 150 basis points.”

It expects the central bank to move to a liquidity withdrawing cycle from the third quarter of 2009 once economic growth momentum picks up.

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