The Indian rupee is likely to appreciate to levels of 54 or below versus the US dollar by December, a survey conducted by Royal Bank of Scotland ( RBS) shows. According to the survey with 130 market participants, the Indian currency is further likely to appreciate to levels of 53 by March 2013. Around 58 per cent of the participants believe that the rupee is trading neutral, while 27 per cent are of the opinion that the market is 'short'. Around 25 per cent of respondents are looking to sell the dollar-rupee pair on upticks, while 19 per cent are looking to buy when it trades lower. Most participants of the survey expect the Reserve Bank of India to cut the repo rate by 50 bps by March 2013. The survey also revealed that respondents expect the 10-year benchmark yield to fall to 7.90 per cent by December and to 7.85 per cent by March. On Thursday, the rupee was trading at 55.996/02 to the dollar compared to its previous close of 56.16/17, en route to snap a four-day losing streak that saw the Indian currency hit its lowest this month. Some of the gain, with a session high at 55.85, is being attributed to expectations for another round of quantitative easing from the Federal Reserve. However, month-end dollar demand from oil companies will likely limit further gains in the rupee. "There are no specific flows in the market as such, but broadly people are expecting more stimulus from the Fed," a senior dealer with a private bank said.

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