Indian Rupee: Set for annual decline of nearly 3%; Dollar hold reins for the pair

The Indian rupee is expected to extend downside amid thin trading volumes and lack of much cues on New Year?s eve. Muted equities and persistent strength in dollar overseas is seen limiting any recovery in the local unit. Further rising international oil prices are likely to further weigh on the domestic currency. INR is loitering around lifetime low levels as the counter breached crucial Rs 85 per dollar mark and still shows a weakening trajectory. Foreign fund outflows and sharp decline in local equities dragged the currency lower. This year the Indian rupee lost 2.7% breaching two crucial levels. Upcoming government policies and budget announcements will likely determine direction for the pair with dollar continuing to hold reins for the counter.

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