M anaging one of the world’s fastest growing economies just got 6.8 per cent tougher. That’s the quantum of the unexpected fall in the rupee vis-a-vis the dollar in September alone; it’s now flirting with the psychological mark of Rs 50 to a dollar. If the Eurozone crisis and the dismal economic data from the US weren’t bad enough, the weak rupee has just added another dimension of extreme uncertainty to the basket of problems which Indian companies and policymakers are grappling with.

Given the volatility in exchange rates, it’s unclear which way the rupee will move. K. Gurumurthy, currency analyst with Calcutta-based Kshitij Consultancy, expects the rupee to reach levels of Rs 50.5 by the end of the year. “In the immediate range, for the next couple of weeks, we will be looking at Rs 48 on the downside and Rs 49.5 on the upside,” says Gurumurthy. In another estimate, FIEO president Ramu S. Deora feels the rupee may go up to Rs 45-46 levels by next month.

Truth is, nobody really knows for...