Re may trade at 53 versus USD by March

The rupee is likely to trade at the 53 level to a dollar by March with a likelihood of the Reserve Bank buying dollar if rupee touches 52 level, a report of Bank of America Merrill Lynch said.

"The RBI will likely buy forex if the rupee strengthens to 52 per dollar levels with the dollar settling at 1.30 per euro.

"It will likely defend 56 per dollar levels if the dollar climbs to 1.20 per euro. Our forex strategists see the rupee at 53 level by March," it said.

The report also said that the domestic currency was likely to trade weak in the near future.

Talking about the current account deficit number, it said, "We have raised our...FY13 current account deficit forecast by 40 basis points to 4.1 per cent of GDP".

Current account deficit, which is measured by the difference between a country's exports of goods, services and transfers to total import within a time period, touched a record high of 5.4 per cent in the second quarter (July-September) or at $22.3

billion on the back of falling exports.

The CAD stood at $38.7 billion or 4.6 per cent of the gross domestic product during the first half of the current fiscal.

This was mainly contributed by gold imports which amounted to $20.25 billion during this period.

Referring to gold, the report said that gold remained a swing factor and its imports were likely to pick up from this time.

"Gold imports remain a swing factor. While gold imports have come off 23.9 per cent in April-November, we expect a pick up now with the winter wheat planting progressing smoothly," it said.

Reacting to the release of the data earlier this week, Finance Minister P Chidambaram today said the government is contemplating measures to curb gold imports, but did not go into the specifics.