The Central Bank believes the rupee can strengthen to around 125 per US Dollar due to high foreign inflows into the economy.
Since April, the Central Bank and Finance Ministry have repeatedly said the rupee should stabilise at around 125 per dollar, given the macroeconomic policy fundamentals after a series of policy reforms this year, including a flexible exchange rate to avert a balance-of-payments crisis.
However, the currency hit a record low of 134.30 on 28th June, before stabilising around the current level of 132 and has fallen more than 16%since November last year.
