The Indian rupee is likely to appreciate to 46 a dollar in the backdrop of a stable government at the centre and relatively resilient domestic demand, says a report by global financial services giant Goldman Sachs.
"We expect the INR to appreciate further from current levels as the stable government and relatively resilient domestic demand become key catalysts for foreign inflows," the report said, adding that the Indian currency "may touch Rs 46 to a dollar within 12 months."
Noting that there are significant pressures for rupee appreciation, the report said that the Indian currency gained about 5 per cent against dollar since the victory for the Congress-led UPA in the general elections.
With the rupee strengthening, it said the sectors dependent on imports will gain, the exports will be hit.
"Oil distribution, fertiliser and capital goods companies are amongst the largest importers and are likely to benefit from a stronger INR. On the other hand, IT, textiles, pharmaceutical, and export-oriented oil refining are likely to be hit by a strong INR," the report added.
Having appreciated during the last six trading sessions, rupee on Monday declined by 22 paise to 47.32 a dollar in early trade on expectations of fresh capital outflow by foreign funds.
Source - Rediff.com
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