Westpac says rupee likely to enjoy positive start to 2013

An employee counts rupee notes at a cash counter inside a bank in Kolkata June 18, 2012.

Reuters Market Eye - Westpac says the rupee could enjoy a positive start to 2013 as the recent rebound in factory output, PMI data, along with equity market resilience is pointing towards a better growth environment for India through first half of 2013.

"Combined with a likely RBI rate cut in the early part of Q1 and we suspect the market will feel more comfortable in a rebound in growth," says Westpac in a note.

Any rate cut will encourage further capital inflows, and will provide positive back drop for USD/INR view of 53.8 for end March, the note says.

January has been a historically much better month for Asian currencies compared with May, June and August, says Westpac. In fact, historical data shows INR has the best mean return for January (0.83 percent), followed by THB and IDR.

The RBI is unlikely to curb any INR strength unlike other Asian peers. Any jump in USD/INR between now and end of the year can be viewed as an opportunity to sell, it says.