"There is further INR weakness in store before it eventually stabilizes as global calm returns once (the) COVID-19 impact peaks and global coordinated policy measures start to kick into growth, which is at a multi-year low in India," said Madhavi Arora, lead economist, FX and rates at Edelweiss Securities.
After giving up over 7% since the start of the year, the rupee fell to a record low of 76.42 to the dollar on Wednesday.
The Reuters poll of market strategists and analysts taken March 30-April 2 predicted the rupee would strengthen 3.1% to 74.00 per U.S. dollar in a year from 76.39 on Thursday, based on the median forecast. Forecasts ranged from 71.50 to 80.00, implying a 6.4% rise to a 4.7% decline.
The latest outlook matches a wider poll of strategists, who forecast EM currencies would make up some lost ground. Most expect the U.S. dollar's strength to remain intact over the next three months.
The rupee is forecast to trade at 75.55 and 76.00 per dollar by the end of April and mid-year, respectively. Those forecasts were also in a relatively wide range, 72.45 to 79.00.
Of the 39 respondents polled, 17 still expected the rupee to depreciate beyond its recent record low at some point over the next year. That may be partly because India's economy was already slowing before the coronavirus
spread into a global pandemic.
It grew just 4.7% in the three months to the end of December from a year earlier, the slowest expansion in over six years. Growth is forecast to slow to 4% in the quarter just ended and then to half that rate, 2%, in the current one.
The Reserve Bank of India cut interest rates on March 27 by 75 basis points, its biggest cut since 2009, during the global financial crisis, to 4.40%. That followed 135 basis points of cuts in 2019.
In addition, the RBI announced targeted long-term refinancing operations to ensure market liquidity.
Some strategists said the RBI's interventions prevented the rupee from falling further.
"The RBI may continue to step in to prevent excessive INR depreciation but is unlikely to alter the currency's inherent trend immediately. We will end up flowing with the emerging-markets
space in the current mayhem," said Edelweiss Securities' Arora.