Re slide due to supply mismatch; may touch 65: HDFC Bank

The fall in the rupee is due to a demand and supply mismatch and unless there are sources other than RBI, the currency will continue to fall lower, says Ashutosh Raina, head - forex trading, HDFC Bank.

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Speaking to CNBC-TV18, Raina adds that the rupee may touch 65 if there no positive indication from the Fed's minutes. Below is the edited transcript of the analysis on CNBC-TV18 Q: 64.11 – yet another closing low for the rupee. Are you concerned that the Reserve Bank of India’s (RBI) measures are not having the desired impact?
A: It looks like that. This is a classical case of a demand-supply mismatch. Unless, there are supplies from sources other than the RBI, these shocks will continue to occur. Q: What is your view on the nature of buying today?
A: The volumes did not dip much. It was mostly illiquidity in the market that caused so much volatility. Most of the participants did not hold on to positions. So, even covering positions of USD 10-15 creates volatility. Q: Did custodial banks or FIIs lead buying?
A: It was a combination of all — custodial as well as the private and nationalised banks. And it was not limited to one sector. Q: With the suppliers being only a few state-owned banks, did you get the impression it was the RBI buying?
A: Yes. Q: Are you looking at any levels at all?
A: It looks like the rupee may touch 65, but we will have to see what emerges out of the FOMC minutes.