Rupee to hover in 59-61/$ for now: HDFC Bank

Ashutosh Raina of HDFC Bank expects the rupee to be in the 59-61 per USD range for the time being. He sees this weakness continuing in the Indian currency on the back of good jobs data from the US and expectations of quantitative easing (QE) tapering off sooner than later.

He expects the rupee to find support at 60 per USD now. The rupee on Wednesday breached the psychological mark of 60/USD in early morning trade before closing at 60.20/USD. He expects the Reserve Bank of India (RBI) to step in to curb the volatility in the rupee, but not support it. Also read: All you wanted to know about falling rupee Below is the edited transcript of his interview to CNBC-TV18. Q: What happened in yesterday’s trade which resulted in the breach of 60/USD? What is the trend you are picking up for the near term? A: We are again in 59-61/USD range for the time being. Going by the global cues yesterday, it was a negative for the dollar-rupee. It resulted in touching around 60.35-60.36/USD levels intraday and settling around 60.25/USD level. But going forward with quantitative expectations (QE) tapering off and with good data coming from the US, a slight more weakness in the dollar-rupee going ahead can be seen. Q: Where exactly would the rupee could weaken? What will be the levels to watch? Where is the support for the rupee? Is it still at the 60/USD mark? A: 60/USD mark has become a strong support for the time being. With the flows having dried up substantially and outflows still continuing, expect the rupee to be under pressure only. Q: Would you then expect the Reserve Bank of India (RBI) to step in at any point? A: We expect RBI to step in just to stem the volatility, not to support the currency. It doesn’t make any sense in the face of dollar strength, to aggressively support the currency beyond a point. Q: Did we see the RBI intervene yesterday? A: No, I doubt if the RBI was in the market yesterday.