Budget 2015-16: Impact on Several Aspects (Dollar Vs Rupee)- 1

Budget 2015-16: Impact on Several Aspects (Dollar Vs Rupee)- 1

Analyst expects the rupee to weaken in the run up-to the budget 2015-16 with corporate, importers increase their dollar buying from the market. The value of the rupee is already trading week, having breached the 62 mark. Experts believe that it can touch 63 against the dollar.

On Wednesday, Rupee ended weak for the third straight trading session to end at a one month low of 62.26 against the dollar, compared to the previous close of 62.20.

Finance Minister says “India will not stray from a plan to slash its fiscal deficit to 3% of gross domestic product within two years. Mr. Arun Jaitley said on Thursday, despite top aide’s advice to revive the economy with more infrastructure spending. Finance Minister is going to present first full year budget for the financial year 2015-16 on Feb 28; he said that the current level of deficit was unacceptable.

Forex Consultant said that corporations are booking are import exposures ahead of the budget. The trend for the rupee is towards weakening because of whatever position they have, they have to hedge that. Going forward, even government debt payments may come up due to which the rupee can breach the 62.40 to 62.50 levels.

Mr. Jaitley said that we have a roadmap to bring the fiscal deficit down a little below 3% over the next couple of the years and then we intend to maintain it. India’s fiscal deficit touched 5.25 trillion rupees or 99% of the full year’s deficit target in November.

In the budget 2015-16, Finance Minister expected to announce subsidy cuts while allocating more for infrastructure. Falling oil prices have reduced the fuel subsidy bill and the government has roughly halved expenditure growth this fiscal year.

However, India’s economy is recovering from its long slowdown since the 1980s but demand and investment remain weak.