The rupee has been weak right since the financial year began, which was to begin with more on account of the policies announced relating to retrospective taxation and GAAR.

According to CARE Research, fundamentals appear to be weak for rupee and point towards depreciation.

It is expected that the capital flows will help to cover the current account deficit and the rupee will remain in the range of Rs 54-56/USD for most part of the year. The deviations would be only temporary in either direction, it said.

“Looking at the Forex derivative markets, the December contract is in the range of Rs 55-55.50/USD while that for March is around Rs 56. It may be conjectured that the market too is looking at a similar range,'' CARE said.