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Experts see Re stabilising at 57-58 level within a month

Source : PTI
Last Updated: Sun, Jun 23, 2013 08:26 hrs
A grocery shop owner counts rupees in the western Indian city of Ahmedabad

Notwithstanding the rupee trading near its life-time lows, the local currency is likely to stabilise around 57-58 level against the dollar in the next one month, say experts.

"After the knee-jerk reaction to the US Fed's statement on educing its bond buying programme, the rupee is likely to stabilise in the near future. I think, the rupee should be around 57-58 level to a dollar in the next one month as the current account gap improves and foreign fund inflows come," Corporation Bank General Manager P Paramasivam, who looks after treasury operations, told PTI.

He said the money from the USD 5.5-billion Unilever offer open to raise its stake in Hindustan Unilever is likely to come in July, which will support the currency. Since April 30, the rupee has fallen by over 10 per cent.

On the high CAD, which had touched a historic high of 6.7 per cent of the GDP in the December 2012 quarter, Paramasivam said it will be significantly lower in the first quarter due to lower gold imports, which should also help the rupee appreciate.

After the US Fed chairman's last week said the central bank is likely to reduce the USD 85 billion monthly bond buying programme by the end of the year, the rupee on Thursday touched life time low of 59.98 intra-day and closed a bit higher at 59.58 after the RBI intervened.

However, it has since then pulled itself back to 59.27 on the back of selling of dollars by banks and exporters as well as RBI intervention.

"The rupee is showing an appreciation bias. We have seen stabilisation in the European and other global markets after the reaction to US Fed's statement. This will support the rupee," Geojit Comtrade chief currency strategist Hemal Doshi said.

He also said the market is expecting some measures from the government and RBI, which could also contain further fall.

IDBI Bank treasury head N S Venkatesh has also said the foreign fund inflows will come back to the country once the initial panic over US Fed's statements is over.


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