It pegged the CAD at 3.5 per cent for the fiscal.
"We remain positive on the rupee due to an improving current account deficit and greater capital inflows, in part due to the recent reform efforts by the government, as well as the global easing of liquidity.
"We maintain our 12-month rupee target at 51 to the dollar," Goldman said in a note on Wednesday.
Stating that CAD had peaked last fiscal, it said, "We continue to maintain our earlier forecast that the CAD may have peaked in FY12, and will likely trend down due to the sharp rupee fall. We expect the FY13 CAD at 3.5 per cent of GDP, down from 4.2 per cent in FY12."
The rupee has been on northward-ho since July, after hitting a life-time low of 57.13 mid-June. Since the beginning of the year, the local currency has gained over 7 per cent, and still it is down 18 per cent from its pre-August 2011 highs.
The rupee closed 2011 as the biggest loser among the BRIC currencies and still continues to be so.
The CAD, which is the difference between foreign currency earned and expended, touched a historic high of 4.3 per cent of GDP for the full year in FY12, while in Q2 of last fiscal it had touched a whopping 4.5 per cent of GDP.
Describing the improvement in balance of payments situation in Q1 as on "expected lines", Goldman said while CAD in Q1 was higher than consensus expectations, it was an improvement over Q4,
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