The tumbling rupee could depreciate further to touch 75 per US dollar by the end of 2014 if the Reserve Bank of India fails to take more proactive steps to rebuild the country’s forex reserves, said Bank of America Merrill Lynch (BoAML) in its recent report.
The collapse of rupee is likely overdone but INR expectations were racing to Rs 70 per dollar and now even Rs 75 per every dollar, it added.
“A conservative estimate is USD/INR goes to 70 year-end and 75 by-end 2014 based on NDF forward pricing,” said the financial services firm.
Rupee traded at 67.33 per dollar, recovering sharply from the session low of 67.92 on Thursday.
The Reserve Bank announced fresh measures to check free-fall of the currency by opening a special window to help the three state-owned oil marketing companies needing about $8.5 billion every month meet their daily foreign exchange needs.