The rupee is expected to remain under pressure in the current fiscal due to increased risk aversion seen in global financial markets and a likely dollar appreciation overseas, Kotak Mahindra Bank said on Wednesday.
* "The dollar is likely to remain strong against the euro and other major currencies (except yen) in the first half of 2009 but will start giving up its gains in the second half of 2009," Indranil Pan and Kaushik Das economists at Kotak Mahindra Bank wrote in a note.
* "There is a high probability of rupee to re-test the previous lows of 50.60 per dollar once more in the next three months. We expect the rupee to trade in a range of 49.00-51.00 per dollar by end March 2009," they wrote.
* We expect a reversal in trend from around the second half of 2009 with rupee trading at around 46-47 per dollar levels by end December 2009.
* India may see a gradual improvement in flow of foreign funds into the economy, more specifically in the fourth quarter of calendar year 2009. This is likely to be positive for the rupee along with an expected significant improvement in the current account on the back of reduction in the import bill.
* A rising balance of payments is seen posing a significant risk for the rupee. However, with a significant downward correction in global crude prices and also a dip in non-oil imports, the current account is seen improving in the second half of FY09.
