Rupee to hover in 61-62/$ for now; 63/$ likely: HDFC Bank

Ashutosh Raina of HDFC Bank believes the impact of measures taken by the Reserve Bank of India, in order to curb rupee volatility, will come in gradually. In an interview to CNBC-TV18, he says the rupee will be hovering around 61-62 levels against the dollar.

However, Raina is not ruling out a steeper fall to 63 against the greenback.  "Most of the tapering expectations of the US have been factored in the current pricing so we may slip a bit from these levels, 62-63/USD is a possibility but I think majorly it should hover around 61-62/USD levels for the time being," adds Raina. Also read: Rupee drops despite RBI's measures; FM disappoints Below is the edited transcript of Raina's interview to CNBC-TV18. Q: The rupee yesterday did seem that it was getting some bit of strength but towards the end of the day, it did close around that 61.3/USD mark. Importantly, today the dollar seems to have strengthened a bit as well, how are you viewing the rupee today? A: The measures announced on Monday by the finance minister are a welcome positive. It should augment a bit of inflows into our market. However, looking at the current global trend, dollar strength and we should be hovering around these levels. We should not see too much of an appreciation for the rupee. About 60-60.20/USD may be the bottom. Q: Given that the rupee will be moving around these levels, how much of a sentiment impact do you think is the fact that despite fresh measures being announced by the Reserve Bank of India (RBI)- the first of them kicked off yesterday- we are not seeing the kind of strength in the rupee that one would have imagined, how are traders viewing the kind of sentiment that is moving around the currency? A: The fact remains that we will have to look at a kind of responses and that timeframe that these measures will take up. So, it cannot be an immediate inflow into the market. This will be over a period of time. So, that impact will come gradually and slowly and offset the outflows. Maybe down the period of three-four months we may get these flows. Q: What is the worst case scenario for the rupee in the coming one month odd, are you looking at 62/USD, do you think it is realistic possibility in this month itself? A: Most of the tapering expectations of the US have been factored in the current pricing so we may slip a bit from these levels, 62-63/USD is a possibility but I think majorly it should hover around 61-62/USD levels for the time being.