According to a survey of professional forecasters, who are a bunch of economists not from Central Bank, the rupee will end the fiscal at 59.5 level against the dollar by March 2014.
They even see the currency trading at the same level even till the first quarter of FY15. The survey sees the rupee again breaching the 60 mark in the current quarter and recovering a tad since then. Rupee had breached 61.21 in day trade on July 8.
Since May 22, when US Fed chairman Ben Bernanke hinted that he would taper off the easy money flow by the end of the eyar, the rupee has been under pressure, leading to FIIs to pullout from the domestic market.
And when finally Bernanke on June 19 had specified a time-table for the tapering, the pressure on the currency mounted again. Since May last week, the FIIs had pulled out over USD 11 billion from the market.
Faced with large rupee volatility, RBI stepped in on July 15 with various measures with a view to restore forex stability.
The Reserve Bank steeply raised the marginal standing facility rate and the bank rate, restricted access to borrowing under liquidity adjustment facility, stipulated higher daily maintenance of cash reserve ratio and undertook open market sales of government securities.
The measures helped rupee to remain sub 60 level since then. On Monday, it ended at 59.41 with a loss from last Friday's close of 59.04. However, the RBI in its first quarter macroeconomic and monetary development said, "The priority of monetary policy now is to restore stability in the currency market so that macro-financial conditions remain supportive of growth."
It further said structural reforms to reduce current account deficit and stepping up savings and investment will support RBI's objective.


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