Indian Rupee on slippery slope for at least a year: Sources

The Indianrupeewill not recover lost ground in the comingyear, according to aReuterspollof currency strategists who are more pessimistic than last month amid doubts over any kind of trade truce between the United States and China.

Most emerging markets currencies have depreciated against the USdollar, hurt by the tit-for-tat trade war between the world's two largest economies, and there are scant signs of a resolution anytime soon.

Also weighing on the currency's outlook, the Reserve Bank of India has cut its key interest rate by 135 basis pointsso far thisyearto support a slowing economy. It is expected to cut the repo rate by another 25 basis points to 4.90 per centon Thursday.

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"Global trade talks are turning topsy-turvy, a lot will depend on how that plays out. Domestically, the tide has turned rough for the INR, led by tapering of domestic growth optimism and fiscal worries - all weighing on therupee's way forward," Madhavi Arora, lead economist, FX and rates at Edelweiss Securities said.

"After December's rate cutreforms in the banking sector and strong infrastructure investments are needed in addition to a monetary stimulus to help growth and therupee."

The December 2-4poll, taken before the monetary policy committee's announcement due later on Thursday, showed the currency would weaken 0.6 per centto 72.00 per dollar in ayearfrom 71.57 where it was trading around on Wednesday.

Theyearahead outlook was the most pessimistic for therupeesince October.

Over the comingyear, 23 of 51 strategists expected therupeeto breach 72.40 against the dollarits weakest trade thisyear. Six of those expected it to weaken beyond its lifetime low of 74.48 per dollar.

But a few analysts argued therupee's weakness was a deliberate attempt by the RBI to boost exports that have been on a downward trend.

"There is a conscious effort by the RBI to provide a depreciation bias to therupee. That could probably become a new norm for atleastsometimes, so the export sector slightly benefits," said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank.

"The pace at which the RBI has been buying dollars clearly signals a new policy the RBI is adopting. Its bias for a relatively weaker currency will determine its direction. This is an unsaid policy obviously, but through actions like dollar purchases it is suggestive of that."