Lack of trig­gers to keep In­dian ru­pee at cur­rent level of 54.30

The Pak Banker - - COMPANIES/BOSS -

The In­dian ru­pee is likely to hover around the present level of 54.30 to the dol­lar in the near fu­ture in ab­sence of any vis­i­ble trig­gers, cou­pled with the lin­ger­ing po­lit­i­cal un­cer­tain­ties af­ter the DMK pull­out and the wa­ver­ing of sup­port SP, ac­cord­ing to mar­ket­men. They say po­lit­i­cal un­cer­tainty af­ter the DMK pulled out of the government last week and the talks of the Third Front re­vival by the Sa­ma­jwadi Party (SP), would also weigh on the cur­rency in the near fu­ture.

“Cur­rently, the ru­pee is hov­er­ing around 54.30 lev­els as there is no vis­i­ble trig­ger for the mar­ket about fu­ture di­rec­tions along with less ac­tiv­ity due to the fis­cal-end phe­nom­e­non. Also, po­lit­i­cal un­cer­tainty is weigh­ing on the ru­pee de­spite the cap­i­tal in­flows. In this sce­nario, the ru­pee is likely to be trad­ing at the cur­rent lev­els,” Chief Cur­rency Strate­gist at Geo­jit Com­trade, He­mal Doshi said.

Doshi added the cur­rent en­vi­ron­ment is pretty con­fus­ing from the trad­ing point of view as there is no vis­i­ble di­rec­tion for the ru­pee. On the in­ter­na­tional front, strength­en­ing of the dol­lar against the euro fol­low­ing the Cyprus cri­sis will drive the ru­pee di­rec­tion, he added.

Trea­sury of­fi­cials of the pub­lic sec­tor banks also echoed sim­i­lar sen­ti­ments, but, added some of the steps taken up by the government will in­crease the cap­i­tal in­flows. “Some of the steps like in­creas­ing the in­vest­ment limit for for­eign in­sti­tu­tional in­vestors are pos­i­tive as far as cap­i­tal in­flows are con­cerned. Also, con­cerns with re­gard to Cyprus is slowly be­ing re­solved. But, there is a bit of stress due to po­lit­i­cal un­cer­tain­ties. In this back­drop, the ru­pee is likely to trade in the range of 53.50-54.50 in the next one month or so,” IDBI Bank trea­sury head N. S. Venkatesh said. An­other trea­sury of­fi­cial, who did not want to be quoted, said, given the cur­rent en­vi­ron­ment, the ru­pee is eye­ing a trig­ger for fu­ture di­rec­tion, ab­sence of which will keep the domestic cur­rency range bound.

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