Re unlikely to fall sharply, to trade in narrow range: HSBC

In an interview with CNBC TV18`s Latha Venkatesh, Hitendra Dave, managing director (MD) & Head-Global Markets, HSBC India gave his readings for the curreny and bond markets. Dave expects rupee to trade in fairly narrow range of between 2% - 2.5% plus/minus of the current number. He believes the bond yields would grind higher.

Talking about offshore financing, Dave said, `` This combination of tight liquidity here, higher rates here, generous liquidity abroad with low rates, clearly is attracting a lot of people to tap those markets and then that demand I think will remain quite strong.``

Below is the verbatium transcript of the interview. Also watch the accompaning video.

Q: First on the rupee. Do you think that this kind of firmness goes on? Today of course there was an extra dose of perhaps positive sentiment because the Commerce Ministry did announce a bit of processing fee and other kinds of sops for exporters amounting to about Rs 2,100 crore in rate calculation but does dollar-rupee pass through this quarter pretty firm? A: I think on the foreign exchange front there has been generally a surprising amount of stability on the value of the rupee, if you take into account the higher crude oil prices or the fact that the stock market is down 15% since the start of the year. General sense might have been for the rupee to weaken. It is therefore given the fact that in this environment it