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Indian rupee, on the other hand, could face resistance at Rs62.84 against the US dollar (Rs17.10 against Dh1) in the coming few days. (File)
LATEST: The Indian rupee fell below the 63-mark, declining 51 paise early Tuesday, hitting a new 11-month low of 63.45 against the US dollar on the Interbank Foreign Exchange.
The decline is result of heavy dollar demand from importers amid falling crude oil prices.
Earlier story:
The Indian rupee fell to a new 10-month low on Monday, with a dirham now fetching Rs17.22.
The fall in the currency has been attributed to an unexpected contraction in industrial output in the country, raising concerns of economic growth coupled with significant losses in emerging market currencies such as Indonesian rupiah.
The partially convertible rupee closed at 62.94/95 per dollar on Monday, after reaching 62.95, its lowest level since January 28 compared with 62.29/30 close on December 12.
The rupee dropped 1.03 per cent, its highest single-day decline since its 1.05 per cent fall on August 6.
Despite the decline, HSBC, a global bank, has predicted that the rupee to be the strongest of the Asian currencies in 2015.
“Lower oil prices should mean a persistent improvement in the current account and inflation. The Reserve Bank of India is committed to lowering inflation expectations and now has the ability to curb excessive rupee weakness,” HSBC’s head of Asian forex research Paul Mackel said in a report.
The bank expects the rupee to hover between 62.50 and 63.00 to the dollar next year, which keeps it pretty much where it now, at 62.60.
The bank picked the rupee as the 'safest' bet in the new year amid soft growth and rising disinflationary pressures, expecting the Rupee to be more resilient, as better terms of trade help bolster external balances via soft export volumes and commodity prices; and domestic growth can be supported by structural reforms and the ability to add leverage.
“This combination of global and local factors favours the rupee the most followed by the Indonesian rupiah and the Philippines peso,” the bank said.
Earlier Moody’s, an international ratings agency, has said that the Indian economy is expected to pick up pace in 2015 and grow in the range of 5 to 6 per cent, helped by strong domestic demand.
The ratings agency said the country has benefited from a strong domestic demand base and diversified export markets that give protection from the effects of a slowing Chinese economy and soft growth in the euro zone and Japan.
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