Forecast for historic rupee low grows as oil prices widen deficit

The bearish forecasts -- which will see the rupee drop as much as 4% from current level -- stem from a deterioration in India's external finances

The worst is still to come for the Indian rupee after its slide in May to a historic low, according to analysts and forward markets. 

The currency may drop to between 79 to 81 per dollar over the next few months, according to analysts from UBS AG to Nomura Holdings Inc. and Bloomberg Economics. Forwards are also pricing in a similar weakness for the rupee.

The bearish forecasts -- which will see the rupee drop as much as 4 per cent from current level -- stem from a deterioration in India’s external finances. Higher oil prices threaten to widen the current-account