Rupee hits six month high.whether the smooth ride for the rupee will continue?

Whether Indian stock markets will touch new highs this year is anybody's guess. But the trend that is equally engrossing for bankers, economists and policy makers this year is the rupee's gain against the US dollar. The rupee recently rose to a near six-month high against the US dollar. This was primarily in response to recently announced reforms. The measures to attract foreign investment in the areas of retail, insurance and pension has revived interest in the Indian currency. Moreover, the government's keenness to improve India's fiscal status has given some confidence in the state of the economy. However, it is unlikely to be a smooth ride for the rupee. Political uncertainty and relatively weak economic fundamentals is l ikely to make the currency gains vulnerable from here on. Moreover, the proposed reforms will face a tough fight in Parliament before they stand a chance to get passed as bills. Hence, investors and importers may make hay while the rupee outshines the dollar. However, the resolution of fiscal and current account deficit problems will decide its final fate.