Indian rupee
A customer counts money before paying a vegetable vendor at a market in Mumbai, India, June 4, 2015.Reuters

The rupee is expected to depreciate to 70 versus the US dollar in the next 12 months, but the fall is likely to be "orderly" due to the central bank's intervention, according to a currency expert.

Weakness in the rupee resumed on Friday, with the currency falling to a two-year low of 67.66 against dollar. The rupee had hit a record low of 68.85 in August 2013, when fears over interest rate hike in the US were at the peak.

"The rupee may find some support at 67.50/dollar, but over next 12 months the rupee could hit 70," said Jamal Mecklai, CEO of Mecklai Financial.

Mecklai added that the rupee's fall would be "orderly with support from the Reserve Bank of India".

RBI Governor Raghuram Rajan has "repeatedly" said the central bank would intervene in markets to arrest excessive slide in the rupee, but will not target any specific level for the currency.

So far in 2016, the rupee has already depreciated about 1.5% against the dollar. The fall has been led by a strengthening dollar as positive US economic data raise expectations over further hike in interest rates by the US Federal Reserve.

The rupee is also pressured by worries over yuan devaluation by the Chinese authorities. Depreciation in the Chinese yuan earlier this month had led to sharp sell-off in the Indian stock markets, affecting the rupee movement.

Chinese yuan has dropped nearly 1.5% against the dollar since the beginning of 2016.

Mecklai expects the yuan to fall further on concerns over slowing Chinese economy, weighing on emerging market currencies.

"China will be the main driver of currencies," he said.

Domestic benchmark equity indices currently trade at an 18-month low on the back of aggressive selling by foreign investors. Foreign institutional investors (FIIs) have offloaded shares worth Rs 6,500 crore so far this month.

The slump in stock markets, which led to massive outflows, has also dragged the rupee down to two-year lows.

"The RBI was protecting 67 for a long time. The charts shows that every time it (the rupee) went near 67/dollar, they (the RBI) would come to push it away. But finally they have let it go past 67 levels," NDTV quoted Mecklai, as saying.

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