Kotak Bank sees Re range bound at 58-61 against United States $

Jul 23 2014, 18:26 IST
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Kotak Mahindra Bank today said it expects the rupee to be stable in the 58-61 against the US dollar range in the short-term and that Kotak Mahindra Bank today said it expects the rupee to be stable in the 58-61 against the US dollar range in the short-term and that "the days of volatility in the currency are behind us." (Photo source: Indian Express)
SummaryKotak Mahindra Bank today said it expects the rupee to be stable in the 58-61 against the US dollar range...

Kotak Mahindra Bank today said it expects the rupee to be stable in the 58-61 against the US dollar range in the short-term and that "the days of volatility in the currency are behind us."

"We expect the rupee to be stable at the 58-61 range and the volatility which we saw in the currency last year will not arise again," its Joint Managing Director C Jayaram told reporters here.

Jayaram said there was a lot of concern over the rising current account deficit, which analysts say was one of the reasons for the rupee fall mid last year but those worries are now taken care of.

It can be noted that following the US Fed's announcement to trim its asset repurchase programme late May 2013, there was a heavy sellout on the rupee and the domestic currency also touched an all time intra-day low of 68.85 to the dollar on August 28 last year.

However, a combination of unconventional measures taken by the RBI and the government, coupled with the increase in fund flows, resulted in the rupee stabilising for some months now and is trading at the 60.20 levels today.

On the interest rate front, Jayaram said he expects inflation to glide down to 6 per cent in few months as desired by the RBI and hence, there is a chance of some softening in interest rates after a year.

They will, however, remain high in the short term, though possibilities of a spike are limited, he said. He said other worries which affected us last year like a downgrade of the sovereign rating to the junk status are also behind us.

On the worries front, Jayaram said the high fiscal deficit is a concern but exuded confidence that the current government will get a grip over the issue in a year's time.

The monsoon is a concern, he said, but was quick to add that the deficit has been taken care of by the increase in rains during the ongoing month of July.

"In the last few months, there has been a lot of change for the better on the macro-economic front," he said.

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