Aug 27, 2013, 12.39 PM | Source: CNBC-TV18
Manoj Rane, managing director and fixed income & treasury-India, BNP Paribas believes the woes on the current account deficit (CAD) are more currency specific now.
Manoj Rane (more)
Head- Fixed Income and Treasury, BNP Paribas | Capital Expertise: Currencies
Q: How is rupee looking like, it opening so much do you think 65.55/USD, the prevailing high could be taken very easily?
A: When there is a negative momentum like this, how far it goes and for how long it stays is always a difficult call. Unfortunately, the current account deficit (CAD) countries have again seen fair amount of negativity this morning. I think it will remain under pressure till sentiment substantially changes.
Q: Is there further negativity because of the Food Security Act and things which might exacerbate fiscal deficit or do you think this is a global juggernaut and irrespective of domestic politics you are going to see the rupee fall?
A: This remains a global juggernaut but of course our problem is exacerbated by the fact that we are a fairly significantly negative CAD country. This issue is not going to get resolved in the next two-three months. I wouldn’t attribute so much to the Food Security Bill which anyway was expected possibly discounted. I think the other concerns on the CAD are far more from a currency perspective.