(Bloomberg) -- The Indian rupee’s top forecaster is going against the majority. The currency will test a fresh low by year-end, according to Danske Bank A/S, defying the consensus prediction for the first gain in seven years. 

The currency may decline to 83.60 per dollar by December, said Allan von Mehren, chief analyst at Danske Bank, who had the most accurate estimates in Bloomberg’s quarterly rankings. That compares with a median forecast of 82.80 in a Bloomberg survey. 

The Reserve Bank of India may tolerate some gradual weakness in the rupee to keep the nation’s exports competitive, according to Mehren. The currency’s resilience against the dollar’s strength this year has eroded its exports competitiveness, as the rupee strengthened against almost all its peers in emerging markets.

“It is in India’s interest to just gradually let it depreciate” to support exports, said the currency veteran, who has been covering the rupee for about a decade of his 25-year career. Indian exports remain weak, rising only 1% in April from a year ago, after contracting in March.

Still, any weakness will be moderate as the RBI will step in to curb wild swings, he said. The rupee closed little changed at 83.28 on Wednesday, after sliding to an all-time low of 83.5750 last month. 

“If you have too much volatility in the currency, it creates uncertainty for exporters and importers,” Mehren said. “And so, from that point of view, it’s actually a good policy.”

Read: Bullish Case for Indian Rupee Dented by RBI’s Intervention Fears

--With assistance from Karl Lester M. Yap.

(Updates with comments throughout)

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