New Delhi [India], November 30 (ANI): The rupee has come substantially off its all-time low. Currently, it is trading around 81.64-81.70 against the US dollar as against its record low of 83 it breached in mid-October, primarily due to the strength in the US Dollar Index.

Where is the Rupee headed now?ICICI Direct, which is part of ICICI Securities, expects the Rupee to appreciate towards 80 levels by the end of this fiscal year 2022-23 ending March.

"We won't be surprised even if it breaks the major support level of 80 and appreciates further till 79.00 as well. We believe, the rupee may face a strong resistance near 83.50," Raj Deepak Singh, Analyst - FO, Currency and Commodity at ICICI Direct told ANI in response to an email questionnaire.

Further, on being asked whether the worst is over for the rupee, Singh said it looks like the circumstances were getting milder and may "turn the tables" soon for the Indian currency.

"Softening of crude oil prices may be supportive for the domestic currency as it will reduce the import bills. Oil prices may remain in the range of USD 65-USD 90 per barrel even if OPEC continues with its production cut as demand concerns have taken the front seat," Singh said, adding that he believes India is in much better place compared to its peers in terms of Inflation dynamics.

Recent consumer price index data showed that inflation eased to 6.77 per cent from the five-month high of 7.41 per cent in September.

Taking cues from declining inflation print, the Reserve Bank of India, Singh said, may consider moderating the pace of its monetary policy tightening.

"In addition to this pressure on other major central banks to keep raising interest rates took off after US Fed signaled slowdown in pace of rate hike. Moderation in the pace of monetary tightening is the need of the hour," Singh added.

The RBI had already hiked the key policy rate by 190 basis points in four tranches since May to 5.9 per cent to cool off domestic retail inflation that has stayed above the RBI's upper tolerance limit of 6 per cent.

Also, the return of foreign portfolio investors into Indian stock markets has been quite positive for the Rupee.

Foreign portfolio investors infused funds worth around Rs 35,000 crore in Indian stock markets in the month of November and became net buyers again, data from National Securities Depository showed. The latest inflow of funds supported Indian stock indices -- Sensex and Nifty - too, which are trading at their lifetime highs.

Further, on the argument that the rupee is not depreciating but it is the US dollar, which is strengthening, he said: " If we see the current scenario, then the dollar has started losing its steam.""(US Fed) Meeting minutes also revealed that some of the officials were more anxious about the possibility of overdoing the increases. Dollar Index will face a strong resistance near 113 levels and may slip further till 102/100 levels in the coming months," Singh said.

Currently, the US Dollar Index is hovering at around 106-107. The US Dollar Index is an index of the value of the dollar relative to a basket of other foreign currencies. (ANI)