Fed meet expectations hitting rupee; 60/USD seen: Axis Bank

The rupee closed at a record low of 58.78 against the dollar on Tuesday, Sidharth Rath, head of treasury, Axis Bank says that the Indian currency is likely to be rangebound around 60/USD.

He also added that expectations from Federal Reserve’s meeting, which ends tonight is also one key of the reason for rupee's slide. Apart from global factors, huge dollar demand from oil companies and buying of dollars by a large public sector bank to fund a defence related deal, worsened rupee's weakness. Below is the edited transcript of Rath's interview to CNBC-TV18. Q: What in your mind was the key reason for the big slide in the rupee yesterday and how would you approach it given the fact that most Asian currencies are lower given the nervousness as we approach the Federal Reserve policy? A: The rupee will remain in this range. There is no doubt about it. The economic data that came yesterday also led to the rupee moving low. Also, today is the much anticipated Fed's Funds Rate meeting so that is also the key reason. I think the rupee is now becoming rangebound around 60/USD. Q: Yesterday, Arvind Mayaram as well has come out with a few recommendations, which if implemented or if we get some activity on that, could help the rupee. Are you expecting some sort of a relief on the rupee on the back of yesterday’s announcements or it is unlikely to move the currency market? A: I think those are positive announcements. I do not think the impact will result immediately. However, definitely the sentiment should improve on this, no doubt about it.