Rupee outlook: INR poised to touch 70.5 level against Dollar by February end
Due to the 3% stock sell-off in Axis Bank, the government of India is expected to achieve its targeted revenue for the FY19.
On account of Government of India raising Rs 5,300 crore by selling its 3 per cent share in the Axix Bank and NCLT (National Company Law Tribunal) easing the nerves of NBFC investors by allowing 22 companies placed under the "green" category by the new board of IL&FS and the government to start servicing routine debt obligations, according to schedule, experts have expected a bull run into the rupee versus dollar index at the Forex markets. They expect rupee to touch Rs 70.5 per Dollar levels by the end of February.
Speaking on the outlook of rupee against the US Dollar Anindya Banerjee, Research Analyst — Derivative and Currency at Kotak Securities told Zee Business Online, "The rupee will see some positive momentum against the US Dollar and can touch the Rs 70.5 per dollar levels by the end of February." On why he is bullish on Indian national Currency Anindya said, "Government of India (GoI) to sell 3 per cent stake in Axis Bank through SUUTI. This will help government raise over Rs 5,300 crore. This will help GoI get a bit closer to its targeted revenues for FY 19." He said that the rupee was under pressure due to the rising fiscal deficit as the GoI fell short of its GST revenue targets of near Rs 1 lakh crore in FY 2018-19.
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"NCLT allowed 22 companies placed under the "green" category by the new board of Infrastructure Leasing & Financial Services (IL&FS) and the government to start servicing routine debt obligations, according to schedule. This will ease the nerves of the investors in the NBFC sector as many had feared defaults from even the highly rated SPVs of IL&FS. This will assure the investors that ring-fenced structures will honour their obligations. This comes as a positive news for the sector, affected by liquidity and solvency crises," said Anindya Banerjee of Kotak Securities.
Standing in sync with Anindya Banerjee of Kotak Securities views Manoj Kumar Jain, Director and Head of Commodity Research at IndiaNivesh Securities said, "The downside momentum in dollar against rupee is expected to continue following to break down of its immediate support Rs 71.45/dollar and next downside level would be Rs 71.15/dollar to Rs 70.90 per dollar."