Priyanka Kishore of Standard Chartered believes that the rupee will extend its decline to 58 a dollar, after which some strength might seep into the currency. “What started out as fundamental stress is clearly the European uncertainties,” she explained.
The rupee sliced through the 55 mark on Monday and raced to 56 a dollar today as demand from oil companies increase pressure in the system.
Dealers say the Reserve Bank of India has been continuously selling dollars in an attempt to curb the greenback’s decline, however all attempts have been futile.
Below is an edited transcript of her interview. Also watch the accompanying video.
Q: What’s going on? It seems relentless and completely one sided, this move.
A: Yes, that’s correct. We are seeing a lot of downside pressure on the currency and what has exaggerated or what started out as fundamental stress is clearly the European uncertainties.
We have broken through all kinds of levels that the market was focusing on. The breach of 55 is pretty crucial and now, at least on charts, strength only appears to come in around 58. So, technically this move could extend further.