Jayesh Mehta, MD and country treasurer at Bank of America Merrill Lynch and RS Sharma, former CMD of ONGC spoke about the rupee weakness and rising crude oil prices
Jayesh Mehta, MD and country treasurer at Bank of America Merrill Lynch and RS Sharma, former CMD of ONGC spoke to CNBC-TV18 about the rupee weakness and rising crude oil prices.
“There is nervousness globally and there is overreaction happening. So with every dollar move in oil, people try to make 0.50 paise on the currency, which doesn’t make sense. But then, we have a global situation issue with Fed war and it is not only India, but it is also everything else. So that is where the challenge is, but yes I think the Reserve Bank of India (RBI) and the finance ministry are doing their best to keep it within a range. Hopefully, they may do it but I am not bothered too much on the actual range of the thing. More than that, there is a lot of panic reaction which is happening, that is what is disturbing,” said Mehta.
“We are seeing this movement happening every time the oil goes up. I think general feeling is that is more of the chartist kind of situation people are talking about 72.50 per dollar and then the next stop is 74.50 per dollar or something like that. All I am trying to say is when I am saying, I am not too worried, we have to see as compared to dollar strengthening, how we are doing compared to other currencies,” Mehta added.
“The oil marketing companies (OMCs) are the largest buyers of dollar for crude import. The exchange market gets some artificial demand, inflated demand. When such situations came during my tenure, we had gone to finance ministry to allow direct purchase of dollars from RBI, it has got a lot of merits. I feel that is a good proposal that they are agreeing now,” said RS Sharma of ONGC.
“For the last two months, I have been consistently telling that crude prices are bound to go up. I am afraid USD 100 per barrel may not be the cap. This will be very disturbing for the economy but that is a harsh reality,” said Sharma.Watch the video for more.