The spot rupee ended lower at Rs 50.15 per USD as against its previous close of Rs 50.01.
The widely traded 8.24%, 2018 paper closed higher at Rs 106.57 as against its previous close of Rs 105.62.
Hemant Mishra, Head – Global Markets of Standard Chartered Bank spoke exclusively on CNBC-TV18:
Q: Are you expecting any intervention to even hold it at that 50 mark or do you think it might overshoot by quite a lot?
A: I would expect the RBI to intervene through the nationalised banks just to ensure that the weakness is gradual, which is precisely what they have been doing all this while.
For the first time yesterday, the rupee settled on this side of 50, which is higher than 50, which is why it is capped and we are currently looking at 50.53. I think it looks weak for the rupee going ahead. But given the RBIs intervention it would be gradual.
Q: What is causing the highest amount of pressure at this point on the currency? Do you think it is conceivable that the currency in this leg-down goes to 52.50?
A: It could happen, 52 is very much on the cards. What is causing it? I think it is more sentiment than anything else for the simple reason that volumes in the market have not been particularly high. So, the cue is typically asset markets and in this case it is equities, with the Nikkei down 5%, and the Dow down 5%. We are expecting the BSE to open with a gap. Fund outflows will continue. Hedge funds continue to see redemption, which in turn would mean that a lot of the money gets taken out of markets like India.
A bigger influence also is what is happening in the rest of the Asian currency markets. The Korean Won continues to lose ground. In fact it is at one of its weakest now. It is at 14.82 now.
