The rupee, which is currently hovering around 67 per dollar level, is expected to shift from a depreciation path to a consolidative trend over the next 12 months, says a DBS report.

According to the global financial services major, there is neither a need nor a macroeconomic rationale behind a deliberate attempt to devalue the currency.

There were media reports that the Commerce Ministry might propose devaluation of the domestic currency to give a fillip to the exports sector, despite officials’ dismissing the report. USD/INR held above 67 yesterday.

“Such an attempt would run counter to recent efforts by the Reserve Bank of India and the government to establish macro-stability, transparency and policy predictability to attract and retain investors,” DBS said in a research note.

DBS said a deliberate attempt to devaluate the rupee could harm investment interests and trigger capital outflows, and also dilute the boost from the ongoing reform agenda.

Besides, Indian exports are driven more by the strength in global trade rather than currency movement.

Despite the rupee gaining ground since the UK referendum, the unit is still among the worst performers in the region on year-to-date basis.

“Looking ahead, DBS expects the rupee to shift from a depreciation path to a consolidative trend over the next four quarters,” DBS said.

According to DBS, given the central bank’s focus on inflation-targeting and early signs that disinflation is taking root, a weaker rupee could stoke imported inflationary pressures, an unnecessary development at this stage.

Meanwhile, Economic Affairs Secretary Shaktikanta Das had also said rupee is not an administered rate.

“The value of rupee is determined by the market and there is no plan to change the policy. The market reports that government want to devalue rupee is false,” he had said.

The rupee was trading strong by 16 paise at 66.88 in the afternoon deals.