Agum Gupta, Head Forex, Standard Chartered Bank, believes that if crude goes above USD 130 per barrel, then sentiments will immediately take a beating and the market will run towards Rs 43 per dollar. On the other hand, he feels that if there are steady capital inflows into the country, then sentiments can change and a slightly stronger rupee in the short-term can be expected.

Excerpts from CNBC-TV18’s exclusive interview with Agum Gupta:

Q: Do you think that this Rs 42.80 resistance for the rupee will hold and should we quite firmly not cross the Rs 43 mark at least in the next couple of weeks?

A: The resistance is more like at Rs 42.93 or Rs 42.95, that’s where we traded up to on Friday. Rs 42.80 is no longer a resistance level. We expect Rs 43 to hold this week.

Q: What can turn the tide, would you say that any adverse news, for instance oil going up by a couple of dollars, can turn the table or balance completely?

A: If oil goes at about USD 130 per barrel, then definitely sentiments will immediately take a beating and the market will run towards Rs 43.

Q: What can turn the balance in favor of the rupee?

A: Capital inflows. If we start seeing some steady capital inflows in the country, then the sentiments will slightly change and we will be again looking at a slightly stronger rupee in the short-term.

Q: What’s the advice for an importer and exporter at this juncture?

A: At the moment, we look to be in this new range of Rs 42.45-42.95. So, exporters can sell close to Rs 43 and importers should buy on dips close to Rs 42.5. So, we are trading in a short-term range at the moment.