Our Bureau New Delhi
With the ongoing pandemic crisis, Indian rupee has little advanced against dollar. It raised 18 paise against dollar, it was 73.60 on Friday. The rupee was supported by domestic equities and weak American currency. A day before, the rupee had settled at 73.78 against the dollar.
Reliance securities in a research note said that the rupee started this morning on a stronger note against the dollar supported by improved risk appetite in the global markets and weak dollar. The note also said that the rising COVID-19 cases could cap gains.
It was said that rupee is likely to strengthen 1.3 per cent and average 73.5 against the US dollar in the financial year 2022-23, as compared to an average level of 74.4 in the financial year 2021-22.
According to a recent report titled ‘Ecoscope – India’s Quarterly Economic Outlook’ released by Motilal Oswal, the country has posted its first quarterly current account surplus in 13 years and expected to post a first annual surplus in 17 years in the financial year 2021-22. This is a result of a sharp contraction in domestic economic activity, a crash in commodity (oil and non-oil) prices, and very strong capital inflows. Going into calendar year 2021, as the country’s real gross domestic product (GDP) growth improves, its current account surplus would also disappear.
The current balance may move from a surplus of 1.3 per cent of GDP in FY21 to a deficit of 0.2 per cent of GDP next year. However, due to the Reserve Bank of India’s intervention and the general bias against a strong rupee, the currency actually weakened 3.1 per cent against the dollar in this year.