Will The Rupee Rise Further Against The Dollar?

Will the bull run continue or will the rupee have to lock horns with the next crisis, either domestic or international?

$ should do better in 2003

For the first time in a decade, the rupee ended higher in a calendar year closing at 47.98 on December 31 from the level of 48.24 on January 1, 2002. Will the bull run continue or will the rupee have to lock horns with the next crisis, either domestic or international?

Everything augurs well for the rupee for the time being: narrowing trade gap, benign inflation, burgeoning reserves, export remittances, continued NRI remittances, and FDI and FII inflows.

Adding to the positive sentiment is the renewed confidence in the Indian economy, especially at a time when global economy is facing recession and the dollar is weakening against major currencies.

The trade weighted fall in the dollar last year was the steepest since its 16.9 per cent drop in 1987. Over $20 billion is added to our reserves last year. But how long can the good run continue?

There is a strong possibility of the dollar revisiting 47.85 before the next bounce. In the event of 47.85 giving way, the next stop is at 47.40.

There has been a positive correlation between the movement of the dollar index