The Indian currency is likely to continue its downslide and could be in the range of Rs 55-57 in the medium term against the US dollar mainly on account of higher foreign fund outflows, feel experts.
"In the short-run the rupee weakness appears overdone and hence a pullback is expected to be between 53 and 53.5 with 55 as the cap. However, in the medium term there is a risk of rupee weakness extending to 57 levels," Kotak Mahindra Treasury Head Mohan Shenoy said.
Rupee hit another all-time low of 54.85 per dollar in the late morning trade today losing 38 paise on fresh demand for the American currency from banks and importers.
It recovered at mid-way to Rs 54.44 from its record low levels of 54.90 in early trade. It had closed Rs 54.47 versus the US dollar yesterday.
Market experts said rupee has seen a slide against dollar on back of rising imports and slow FII inflows due to high inflation, rising fiscal deficit and policy stalemate.
"The Indian Rupee is at all time low levels against the dollar, on account of dollar index gaining strength. The next key psychological resistance is at 55," India Forex Advisors Founder & CEO Abhishek Goenka said.
Since the US dollar is gaining strength against the major counterparts like euro, we can see rupee weakening further. We expect a 1-3 months range of 52-55 with overall weakness bias in rupee. We might see some intermediate corrections towards 54 but overall target is 55 levels and plus, he said.
