At a macroeconomic level, a weaker rupee is not necessarily bad news for us, said Ananth Narayan, professor at SP Jain Institute of Management.
“It is reasonable to expect that the Reserve Bank of India (RBI) will continue to try and defend the rupee. We have already seen them doing that since April, I suspect they have intervened by about $15-20 billion already and that trend seems to continue even today and going forward,” he said.
“The rupee strengthened against the dollar in 2017 by 6-7 percent. Even in real effective exchange rate (REER) term, it strengthened quite well. It just makes the rupee a lot more competitive especially given the nature of our core flows,” said Narayan.
“Our current account deficit this year is likely to be $70 billion, a level we have not seen in the last six years,” he further mentioned.