| | |
Moses Harding, head-ALCO and economic & market research of IndusInd Bank says, the next technical level for rupee is around 55.25. "If 55.25 gives way then I think there will be a set-up of panic in the market and you will see a quick run to 56.75-57," he adds.
Yesterday, the rupee fell below the key psychological level of 55 to hit a new record low.
In an interview to CNBC-TV8, Moses Harding, head-ALCO and economic & market research of IndusInd Bank says, the speed at which the rupee is moving towards 57 is a worry.
According to him, the next technical level is around 55.25. “If 55.25 gives way then I think there will be a set-up of panic in the market and you will see a quick run to 56.75-57,” he adds.
Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video.
Q: What happened yesterday? Why did the rupee fall so aggressively towards the late end of trade? There are now talks of a special forex bond to be sold by the government, millennium bonds are being talked about etc. How much do you think that would help to stem the fall of the rupee?
A: The Reserve Bank of India (RBI) has done everything to arrest the fall. But the way rupee is running towards 56-57 it is a surprise and worry for the RBI. Nothing has worked out because of the strong bearish set-up on the fundamentals and the negative sentiment on the way forward.
The next option RBI has in hand is to put operative structure and also to generate dollars from overseas so as to support their intervention measures. So, I think if operative structures do not work out, I think RBI will think of bond issuance in the line of resurgent India bonds.
Q: What are the levels now that we can look out for? 55 is something that seemed quite a distinctive is now here, what next for the rupee in the short term?
A: Next technical level is around 55.25. These are the levels where some supplies are expected to come. So, if 55.25 gives way then I think there will be a set-up of panic in the market and you will see a quick run to 56.75-57. I was looking for a 52-57 short-term range. But the speed at which it is moving towards 57 is a worry.
ADS BY GOOGLE
video of the day
Tone down expectations; valuation getting richer: ICICI Pru