Rupee is likely to end the year as Asia's worst performing emerging market currency as foreign funds scrammed from India's stock market, Bloomberg reported.
Global funds have extracted capital worth $ 4.2 billion from the nation's stock markets, leading to the rupee's decline by 1.9% this quarter.
Amidst omicron concerns and in light of Goldman Sachs Group Inc. and Nomura Holdings Inc. lowering their outlook for equities, citing lofty valuations, the foreigners marketed Indian stocks.
Further, an all-time high trade deficit and the central bank's policy differences with the Federal Reserve also adversely affected the rupee.
Head of global markets, sales, trading and research at ICICI Bank in Mumbai, B Prasanna, "the monetary policy divergence and widening current account gap have set depreciation in the rupee in the near term," Bloomberg quoted.
By end of March, QuantArt Market Solutions has speculated a decline of 78 per dollar in the rupee, while a survey of traders and analysts from Bloombergs have forecasted the rupee at 76.50.
In a fourth consecutive year of losses, the rupee is likely to fall about 4% this year.
(With inputs from Bloomberg.)
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