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Enough pressure on RBI as rupee's sentiment negative, may touch 80/$1: Mecklai
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SME Times News Bureau | 10 May, 2022
There
is enough pressure for the RBI to do something unusual amidst sharp
depreciation in the value of rupee, says Jamal Mecklai, CEO at Mecklai
Financial Services, adding that he generally feels the sentiment is
negative.
The Reserve Bank of India's decision last week
to hike key policy rates by 40 basis points in an off-cycle meeting has
surprised everybody.
However, Mecklai, in a telephone interview
with IANS, said: "It was obvious that the US Fed was raising rates that
particular night and if US policy rate goes up, the Indian rupee would
come under pressure. So for several months, the RBI has been protecting
the rupee and probably they feel the rupee has depreciated too much so
let us take action to control it."
From here, where does the
rupee go or will the tide turn or whether the RBI will be able to
manage, he said "I don't know and nobody knows."
Here are some excerpts from the interview:
Q: Do you think RBI will intervene at this point or will wait for further depreciation?
A: They are intervening everyday. That is their job and they have to do that.
Q: What ammunition is available with the RBI for rupee's defence?
A:
They can sell dollars from the forex reserves. Reserves have fallen by
about $45-$50 billion, which is around 8-9 per cent of the total forex
available with India. In 2008-09, the reserves had fallen by $50-$60
billion and that was about 20 per cent of the total and the rupee fell
by 20 per cent. So the fact is that the crisis is not over and I don't
exactly know what will happen.
But, it is not going to fall 20
per cent (now). But if it falls 6-8 per cent from 75 against the US
dollar, it will cross the 80 mark.
Q: Will the RBI hike policy rate further in any off-cycle review or in tnhe next scheduled review?
A: They will certainly have to hike rates as the inflation is very high. They have started and they will continue with the hike.
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
|
84.35
|
82.60 |
UK Pound
|
106.35
|
102.90 |
Euro
|
92.50
|
89.35 |
| Japanese
Yen |
55.05 |
53.40 |
| As on 12 Oct, 2024 |
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