Nomura says capital inflows into Asia could provide some support to the rupee in the first half of 2013, but negative local fundamentals to limit performance.
Investment bank cites lack of fiscal consolidation, the long road ahead in implementing reforms, high and sticky inflation and the large current account deficit as reasons.
Says government needs to take solid steps to tackle fiscal deficit, improve investment climate, but Nomura sceptical given 2013 is pre-election year.
Nomura says bias to build on a long USD/INR position, particularly in the second half, with forecasts at 54.5 by mid-March, 56 in June and 59 by December.
Copyright @ Thomson Reuters 2012