INR likely to soften further

Indian rupee is continuously soften against US dollar in past months. The weakness became more sharper after the Fed's announce its rate hike. In compare to other emerging market currencies, INR is less weaker currency. 

The current account of the economy has improved significantly due to lower oil prices, as a result, rupee is quite stronger. Moreover, market friendly reforms by the government able to attract good volume of FDI. At the same time, economic growth rate of the economy is also stronger.

"In 2016, gradual monetary tightening in the US and continued depreciation of the CNY could weigh further on the INR. We expect a further depreciation of around 5% in 12M", states Danske bank in a research note.