The Indian rupee is likely to strengthen sharply if the Bharatiya Janata Party's Narendra Modi becomes the country's next prime minister after upcoming elections, a report has said.
 
Opinion polls show the BJP is poised to oust the incumbent Congress party.

A BJP win  will act as a "catalyst" for a long-term advance in the rupee toward 40 to 45 per dollar, from 61.19 on March 14, Adam Gilmour, Citigroup's head of Asia-Pacific currency and derivatives sales, was quoted as saying in a Times of India report.

A weak coalition government after the coming election in April-May will be the "worst-case" outcome, he said, and might send the currency sliding beyond August's record low of 68.83.

"The market view is that if Modi gets in, it will be a game-changer," Gilmour said in an interview. "We always take politics with a pinch of salt, with the rare exceptions like India, where it's going to really make a difference."

A jump in the rupee to as high as 40 per dollar would represent a 35% rally in India's currency from the end of last week, and send it to the strongest level since April 2008.

Gilmour's prediction, for which he didn't give a timeframe, is 5 rupees higher than the most bullish forecaster in a Bloomberg survey of more than 30 strategists, whose median estimate foresees the currency at 63 on December 31 and at 58.50 by the end of 2016, the report said.

The rupee could gain as much as 6.5 per cent in the next three months as international investors pump in dollars to buy stocks and bonds, hoping to benefit from a stable government they see being headed by Modi after the elections, delivering an economic revival, according to an Economic Times poll of strategists and traders.

The rupee could climb to as high as 57 against the dollar, it said.