The rupee has touched a 16-month low. Ananth Narayan, Professor of Finance at SPJIMR Narayan said that the correction in the rupee will continue and this is a healthy correction for the currency.
“Over the next few weeks and months we could touch 70/USD and as I said it’s not a bad thing to happen,” he added.
He further said that rupee touching 70 per US dollar will be good for exports and competitiveness.
Reserve Bank of India (RBI) has enough reserves to take care of an eventuality, said Narayan.
Talking about US yield, he said, “The reality is we do require permanent capital flows to cover our current account deficit – that can come in the form of FDI and that can come in the form of maybe FPI in equity.”