Some experts even see the rupee weakening sharply over the next month. "The rupee can go back to 65-66, as in the next FOMC meeting, there are very high chances that they will go for tapering; they wanted to start the process sometime in December," said Pramit Brahmbhaat, chief executive, Alpari Financial Services, (India). In the current financial year, the rupee has weakened by almost 14 per cent. In August, it had touched an all-time low of 68.85 to the dollar in intra-day trade. The Reserve Bank of India has taken a host of measures to arrest the volatility, resulting in some stability.
A few believe the rupee will strengthen. "Foreign Currency Non-Resident Account (Banks) or FCNR(B) deposits, tier-1 capital flows and export flows will help the rupee to appreciate. The (US Fed) tapering will get deferred, even in the December meeting because if the US shutdown effect prolongs, then it will affect the GDP growth numbers and the labour numbers. Due to that, they will not be able to start the tapering even in December," said N S Venkatesh, chief general manager and head of treasury, IDBI
Bank and chairman of the Fixed Income Money Market and Derivatives Association of India.