The lack of progress on the U.S.-India trade deal, compounded by persistent outflows in foreign funds, has weighed on the rupee
this year, making it Asia’s worst-performing currency.
The world’s fifth largest economy could see its currency drop to 92 against the dollar by end-March, Nomura and S&P Global Market Intelligence forecast, with any strengthening largely hinging on a trade deal with the U.S. The rupee was last trading at 89.6 against the dollar.
“We believe the rupee to be undervalued currently, with correction anticipated after there is more clarity on the U.S.-India trade agreement,” said Hanna Luchnikava-Schorsch, S&P Global Market Intelligence’s head of Asia-Pacific economics.
The S&P Global unit expects a trade deal over the next six months.
