Mumbai - The Indian rupee is likely to maintain its current level over the next three months and may only slightly appreciate by the end of February 2024, said a recent Reuters poll of foreign exchange strategists.
This forecast indicates that the rupee may not recover much of its losses from 2022 when it was among the worst performing currencies in Asia.
According to the poll, the rupee is expected to trade at 82.54 per dollar by the end of May, with much of its performance in the near-term being influenced by interest rate differentials driven primarily by the US dollar.
The Reserve Bank of India is expected to conclude its tightening campaign soon, with one last 25 basis point hike anticipated in April, which would bring the main interest rate to 6.75%.
Experts suggest that the rupee's performance will also be influenced by the strength of the US dollar, which has been strengthening again recently.
If the Federal Reserve continues to hike interest rates, the dollar could benefit and put pressure on the rupee, according to Aditi Gupta, an economist at Bank of Baroda.