The Reserve Bank of India (RBI) is expected to wait a little longer before intervening to arrest the falling rupee.
As the decline is driven by external factors, the regulator may give some more time for the currency to stabilise. “We have not reached that critical level which will prompt RBI to take direct actions,” said Anis Chakrabarty, chief economist and director, Deloitte Haskins & Sells.
The regulator may however go for a cut in Cash Reserve Ratio to increase liquidity.
“It is unlikely that RBI will take action to check the rupee as India does not have the comfort of a large forex reserve,” said Moses Harding, head- global markets group, IndusInd Bank.
The outlook for the rupee remains bearish, and traders see its next support at R53.75. The rupee has fallen about 14% since the year began.