Rupee may continue to underperform into next year: JPMorgan

The dollar got as expensive as Rs 50.40 in the early morning trade. The talk in the market is that Reserve Bank of India (RBI) might have sold some dollars.

Brijen Puri, head of foreign exchange trading at JPMorgan feels the rupee will continue to underperform into the next year given poor fundamentals. Moreover, he indicated that the dollar-rupee would see an upward pressure based on the demand-supply mechanism. Here is the edited transcript of his interview to CNBC-TV18. Also watch the accompanying video. Q: Do you sense that the central bankers brought the rupee down? Who else could have helped in this?
A: There were talks about the central bank selling. Apart from that, we also saw some exporters sell. It has been a combination of the two.
Even day before yesterday, there were rumours about the central bank having been offering at various levels. The RBI has been offering, however not holding any particular level as such. Q: How would you chart the course of rupee from hereon?
A: For the past few weeks, nothing has gone right for the rupee. It has been in a little storm of its own. We have seen weak exports and higher imports brought out by the last data that was exacerbated due to the festive season.
Along with that, the local scenario remains fairly poor. The growth, borrowing numbers, inflation and the globally situation keeps getting worse. Based on the demand-supply mechanism, we are seeing upward pressure on the dollar-rupee.
This will probably continue unless one of two things happen