RBI measures unlikely to bring money: Deutsche Bank

Sameer Goel, Head of Asia Rates & Currency Research, Deutsche Bank tells CNBC-TV18 that the definition of long term lock-in period has been changed and anything above 3 years will now be considered in this category. But, Goel is of the opinion that it should be greater than 5 years.

Goel believes, it is just the beginning of a slew of measures from the RBI. Therefore, he will be on the lookout for the remainder of measures. "I think it's the remainder of the measures, which we will have to look for. As of now, it doesn't look like the measures themselves are bringing in too much money. Again, this is probably only the beginning of a slew of measures that they are announcing," explained Goel.

Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.

Q: The ECB limit has been hiked by USD 10 billion, the lock-in period for infra bonds have only been rationalised. We don't have the term just yet, but what are your prima facie thoughts on all of this?

A: At first glance what I can see is that the limits have increased. It's still not clear what the terms and conditions for the increase in limits would be. For the government bond side, the increase in limits seems to be USD 5 billion and that comes in what is defined as a long-term category.

They seem to have redefined long-term to now mean greater than 3 years, but it should be greater than 5 years. That seems like a bit of a mixed move. It is good that they have lowered the tenure limits on those restrictions, but given the fact that all the new limits have come in the restricted category rather than the unrestricted category, that kind of mitigates the positive impact.

USD 5 billion again sounds like a very small sum. I think it's the remainder of the measures, which we will have to look for. As of now, it doesn't look like the measures themselves are bringing in too much money. Again, this is probably only the beginning of a slew of measures that they are announcing.

Q: If this is it, do you see a major pullback in the rupee, which has already reclaimed 15 paisa and gone back to 56.70 plus or do you see the appreciation continuing in the way that it was this morning?

A: If this is all the measures we are talking about, then I don't think that it really makes a huge difference. While a lot of the government bond limits have been utilized and potentially you could see this extra money coming in, it does over a period of time.

I don't think it significantly would reverse the sentiment on the rupee. Having said this, everything the Finance Ministry has indicated and referred to earlier makes me think that this will not be the only measures they will come up with.

Q: What is your reaction on the ECB limit and the G-Secs limit getting hiked? Do you think this will in any way help improve infra inflows or project financing because a lot of that has been stalled until now?

A: I need to see the details of the ECB hikes, whether they come with any terms and conditions. It seems like under the approval route, they have increased it. It now stands at USD 10 billion, but I think what is also important and what has always been important in the ECB route are the interest rates which they are allowed to borrow at.

I think there are a lot more details, which need to be seen to really figure out as to whether these materially impact or not. One thing is very clear from at least the headlines which have come up until now and that is, all these measures are aimed at changing or influencing the supply of dollars to the system or inflow of the dollars into the market.

Those measures, by nature tend to be a little more slow moving against that which is taken to remove dollar demand. That is what the market was expecting in terms of say oil companies taking their dollar bit away.

As of now, we haven't heard anything. So I would suspect any reaction to these will be subject to what the market interprets, what is the amount that can come in, what is realistic about it and all the terms and conditions which comes along with it.