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Rupee likely to hit 74 per dollar by December end: Report

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Rupee likely to hit 74 per dollar by December end: Report
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New Delhi: The latest survey by Bloomberg has revealed that the battered Indian rupee may get some relief from foreign inflows on the back of a slew of large share sales.

According to the survey, the currency, which has become emerging Asia's worst performer over the past month, may gain about 2% from Wednesday's close to 74 per dollar by the end of December.

The survey has noted that with digital companies like Warren Buffet-backed Paytm planning to raise about $10 billion in initial share sales, big inflows may make way for Indian shores.

The rupee has come under pressure as surging commodity prices rekindled worries about inflation and the financial health of the net oil importing nation. A stronger dollar, spurred by rising wagers of U.S. stimulus taper, has also weighed on emerging-market currencies.

Sajal Gupta, head of foreign exchange and rates trading at Edelweiss Securities Pvt. said that historically, when crude was boiling, equities were sluggish, and money was not coming in, so everything turned negative for the rupee.

But he noted that the slate of IPOs should substantially cushion the impact of high crude prices.

The rupee has declined by 3% since early September, and India Forex Advisors Pvt. says the RBI may have allowed losses intending to correct the rupee's overvaluation.

That's why the RBI "has not intervened too aggressively by selling dollars," said Abhishek Goenka, Chief Executive Officer at India Forex Advisors.

The RBI may allow the rupee to trade in a wider range of 73.90-76.90 per dollar in the current fiscal year, he said.

Higher oil prices and fast recovering local demand have boosted imports, widening India's trade deficit to an all-time high in September. Oil imports surged by about 200%.

The data compiled by Bloomberg shows that India got $100 million worth of foreign inflows into stocks so far in October, among the highest in Asia, after receiving $445.8 million in the quarter ended September.

Besides, Paytm, the country's leader in digital payments, Flipkart, the Indian e-commerce giant controlled by Walmart Inc., is also aiming for an IPO as soon as the fourth quarter.

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