Exporters see Re rising to Rs 41/$: Axis Bank

According to RVS Sridhar, Senior VP-Treasury at Axis Bank the dollar-rupee would go down possibly about Rs 41.60/USD or Rs 41.70/USD kind of levels, where again buying will come in. After a very long time, exporters are seeing the dollar-rupee at these levels, he said. There will be a great deal of volatility going forward and attempts will be made in the next three months to test the Rs 43/USD levels because the kind of spike that has come surprised a lot of people, and they have booked profits.

Excerpts from CNBC-TV18’s exclusive interview with RVS Sridhar:

Q: What is your take, is it that exporters think that this is a good level or is it the money market enticement? In the first place do you think that there is a near-term peaking off of the dollar?

A: Yes, exporters will find the levels very good, after a very long time they are seeing the dollar-rupee at these levels. Yesterday we did see quite a fair bit of selling from the exporters, it appears that this is quite a very good level to sell for the next short-term.

Q: Would you say therefore a shy at Rs 43/USD does not look likely in the next six days like tomorrow and the next week?

A: Yes, it is very risky to make such predictions on the rupee and it seems most likely, we have seen the immediate top.

Q: What would be a slightly longer-term view on the dollar-rupee if you have to take it for a quarter? Do you think the volatility will continue or do you think that we have peaked off and we could see a slide and if you do see a slide what is the bottom for the dollar?

A: There will be a respite and there is no doubt about that, I think we should see the dollar-rupee going down all the way to possibly about Rs41.60/USD or Rs41.70/USD kind of levels where again buying will come in. So yes, I think there will be a great deal of volatility going forward. There will be attempts again as we go into the next three months to test the Rs43/USD levels because the kind of spike, which has come, has put a lot of people surprised, and they have booked profits. They will again wait for a lower level to re-enter and we do believe that Rs43/USD is a possible target.

Q: Do you think that 7.74% or 7.76% that we saw in the tenure is about the peak for bond prices, do we enter into a slightly long period of bond weakness?

A: Yes, I think we will get into that. Though liquidity should have been quite good but the fact remains that the CRR hikes have taken away lot of liquidity. We have entered into a period of instability on the forex markets. There is not a great deal of inflows coming in from the stock markets clearly. So putting those two factors together we have a continuous period of issuance of the bonds and various majorities these are factors, which will keep the bond markets under pressure.

Q: What is the range for the tenure?