Rupee will not go beyond 52/USD: Citibank

Lot of factors are going to take the rupee to 52 like the risk rally losing momentum, China slowing down, a couple of Central Banks tapering their rate cuts and a disorderly default in Greece on the global level, and the election results, the Budget and monetary policy on the domestic level says Soumyo Dutta (MD & Head FXLM Trading and Risk Treasury, Citibank).

Though Dutta feels it will hold at 52 and not go beyond that. On the other end of the spectrum, because of the volatility of the markets it can go as low as 49 or higher 48. He advises the RBI to build reserve and buy dollars then at those levels. Below is the edited transcript of the interview. Also watch the accompanying video. Q: Is it 52 next for the rupee you think? A: I will not hazard a guess on the level where it is headed to but it is definitely looking weak and there are quite a few factors. Globally we are seeing the risk rally losing its momentum. In the global financial markets, we are seeing fears of China slowing down. Then the fear of couple of Central Banks removing their monetary accommodation or at least tapering their rate cuts and also probably the possibility of a disorderly default in Greece. That is causing a little bit of nervousness in the global financial markets. Back home, we just had the assembly poll elections results yesterday and the results seem to indicate that UPA has not done as well as markets were expecting them to and then we have an action packed week ahead. We have the WPI, followed by the monetary policy and then we have the Budget and then later in the month we will have the boring calendar and then annual monetary policy on April 17. So all put together quite a few events and this is the time when you have to remain tactical because it can go either way. However we have couple of flows which are lined up in the next one-two days which is for example the MCXSX IPO refund. We will see the FIIs repatriating the dollars and this coupled with the general risk off sentiment can push dollar-rupee higher but yes, on the higher side I think 52 should hold. I don