Rupee to hover in 61.25-61.75/$ range today: StanChart

Agam Gupta, MD, head of FXRC, South Asia, Standard Chartered Bank expects the rupee to open at around 61.40/USD today on the back of strong US dollar. He sees the rupee hovering in the range of 61.25-61.75/USD for the day.

In an interview to CNBC-TV18 he says the government should continue with its stance of tightening short-term rates and should liberalise non-resident Indian (NRI) deposits to attract NRI money. The finance ministry took further steps to arrest rupee volatility on Tuesday by hiking the import duty on gold, silver and platinum to 10 percent Below is the verbatim transcript of Agam Gupta's interview on CNBC-TV18 Q: Another set of steps been taken by the government but what kind of material impact do you see on the currency now in the short-term as well as in the long-term? A: The market was expecting these steps and it is good that they have come. But we have not come with the import curbs on the non-essential items, also expected to be announced on Tuesday. They have only gone ahead with the gold and silver import duty hike. Apart from that, we have to take a watch on what is happening overseas where dollar has strengthened overnight against all the currencies after the US retail sales data and the US treasury yield has hardened. So for the day, we will open with a slightly stronger dollar than yesterday. We closed at 61.20/USD yesterday, we will open at 61.40/USD today and will trade in a range of 61.25-61.75/USD for the day. Q: The Reserve Bank of India (RBI) and the finance ministry have been working together on a lot of things just to support the rupee. What else do they have in their ammunition given that they have laid down most of the cards, do you see any substantial impact post that because the first time they announced any measures was around 59/USD and now it is sitting over that 61/USD mark, what more can they do? A: They can continue with this stance of short-term rates being tight. They can further liberalise non-resident Indian (NRI) deposits to attract NRI money, not much has been done there. They are expecting only USD 1 billion of incremental flows from the new NRI norms that will be announced soon. These are the two main things they could be done to keep the rupee stable because they always talk about the stability of the rupee, but not making it appreciate.