Only prayers can help the rupee recover: Jamal Mecklai

Everyday the rupee is making a fresh low. Today it fell to an all time low of 64.45 against the dollar in late afternoon trade. In an interview to CNBC-TV18 Jamal Mecklai, CEO, Mecklai Financial Services said that this is not the right value for the rupee. He believes that it has gone this way because the sentiment has been negative.

Below is the verbatim transcript of his interview to CNBC-TV18 Q: It is absolute mayhem. Everyday the rupee is making a fresh low. I remember you did say that perhaps the government needs to go to Tirupati. How are people reading the currency at the moment? A: It is pretty tough. This morning it looked like maybe with few moves they did that it was going to give us a break. Reserve Bank of India (RBI) on one side is trying to prevent it from weakening, but there is demand. State Bank of India (SBI) has been buying dollars already for oil companies or whatever. So basically the situation is pretty bad. My Tirupati story is still on and I believe the government is talking to lots of religious trusts to see if they can get gold and which they should do. However, I think it is sort of like there is nothing else we can do. So right now probably it would be best if RBI just let the rupee go. Let it find its own level. Today the goal is to try to get money in, but I do not think anyone would put money in when there is continued prospect of the rupee falling. I do not think the rupee would fall very much more, but if it falls without any propping once it hits that level people will be getting 8.5 percent and will invest. It may take a week or a few days but money will come in. But it will only come in once the current bottom has been seen. Right now, nobody knows where the current bottom is, so nobody is going to come in. At this point they have tried everything, nothing has worked. You have got to let go and pray. Q: This has been a synchronised fall. Therefore do you think whatever the RBI or the government does at this point in time is not going to have any effect? Is it that if the government was to announce some seminal steps on current account, for instance raising diesel prices, it will still make us relative outperformers in an underperforming market? A: I think that the government needs to do all those things. I do not think they need to do all those things to prop up the rupee. They have nothing to do with the rupee. Q: To the extent that there is dollar demand for buying crude this is very much a current account or a trade deficit issue. A: Right now the market is just in free flight. Nobody is going to stop and say, oh good now oil imports will be less by so much. Right now the markets are in full flow. You cannot stand in the way of it. You have to do all of these things because when it hits bottom if there are 4-5 or 20 policies in place which are sensible it will recover much more rapidly. There is no question that exporters are supremely comfortable at 58-59. They do not need 65, they will put it in their pocket. But the fact is this is not the right value for the rupee. It is just that it has gone this way because sentiment has been negative.