Reuters polls show that the Indian rupee will weaken in the next six months as uncertainty rises before the national elections in May.
Although a sharp fall in oil prices should help the Indian economy and the rupee, the sluggish domestic demand has caused more shocks than expected for July-September economic growth, and the resulting worries linger.
The strong performance of the US dollar this year has caused most of the major Asian currencies to stumble, but this week many Asian currencies won some gains following the temporary cease-fire of the Sino-US trade war over the weekend.
But the Indian rupee is the exception, falling more than 1% on Monday, making it the worst performing Asian currency this year by more than 10%.
"Political factors may determine the performance of the Indian rupee in 2019. The political heat has warmed up and the elections currently held in five states will determine the tone of the May 2019 national elections, "said Prakash Sakpal, an Asian economist at ING.
According to a survey conducted from November 28 to December 4, about 40 analysts expect the Indian rupee / dollar INR = IN to fall to 72.00, or more than 2%, by the end of May 2019, after the general election. The Tuesday newspaper was about 70.49.
The forecast for the rupee is slightly better than the previous survey. Nearly half of the 51 analysts expected the rupee to break a record low of 74.48 in the next 12 months, with only 13 out of 49 respondents in the survey.
But without the support of the Central Bank of India, the rupee may not be able to pull back the decline.
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