The rupee, which hit a 2-year low against the dollar on Friday, could weaken further, said Jamal Mecklai, CEO of Mecklai Financial. "If rupee closes at or below 66.80 per dollar, there could be another one rupee fall on account of technical reason," he said. (Watch)
The market sentiment is against the rupee and the government also wants the rupee to become weaker to support exports, said Mr Mecklai. "Generally when lot of people expects rupee to go down, it goes down."
India's exports declined for the eleventh month running in October. Apart from a global slowdown, analysts have blamed an 'overvalued' rupee for the export slowdown.
The rupee today slipped 0.4 per cent or 32 paise to 66.88 per dollar at its day low, a level last seen in September 2013, when India was in the midst of a current account deficit crisis. The fall in rupee has been attributed to continued selling by foreign institutional investors in domestic stock and debt markets amid outflows from emerging markets.
Expectations of a Fed rate hike next month has been resulting in selloff in emerging market currencies, said Mr Mecklai.
He believes foreign inflows are unlikely to support rupee in the near term. The Indian equity markets are likely to remain weak, Mr Mecklai added.
As of 10.53 a.m. rupee was down 0.26 per cent against the dollar at 66.73.
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