Re fall a concern, RBI unable to defend it: IndusInd Bank

The battered Indian rupee hit a record low against the US dollar on Tuesday. The rupee opened at 53.53 per dollar versus 53.23 yesterday.

Moses Harding of IndusInd Bank feels the rupee weakness was not a surprise, but at the pace at which it fell from Rs 44 to Rs 54 levels in just five-six trading days is very worrying.
He believes the fundamentals for rupee continue to remain weak. According to him, the Reserve Bank of India (RBI) has been finding it difficult to defend the rupee because they have short of dollars in the reserves and are short of rupee in the domestic system.
"The RBI has to think out of the box to prevent run away weakness beyond Rs 54 levels," he told CNBC-TV18 in an interview.
As long as euro-dollar stays above 1.30 levels and the Nifty above 4,650 levels, Rs 54 levels will attract some dollar supply. Extended dollar gains below 1.30 levels on the euro-dollar and weak stock market below 4,650 levels is very high risk factor for rupee to run into Rs 56 levels. Also watch the accompanying video for the complete interview...