Bias for rupee is towards bit more weakness, says HSBC’s Khanna
Sep 26, 2017 04:02 PM IST | Source: CNBC-TV18
Pradeep Khanna, MD & Head of Trading, HSBC doesnot expect large outflows from money market.
The rupee is trading at near six-month lows versus the dollar.
Pradeep Khanna, MD & Head of Trading, HSBC is of the belief that appreciation of the rupee was mainly on back of dollar weakness against most currencies but now the dollar seems to be taking a breather and has been gaining strength.
At the same time, debt limits being full for Foreign Portfolio Investments (FPIs) coupled with the fact that the current account deficit has widened, so the flows are more balanced to slightly negative side, which could have led to slight weakness in the rupee, said Khanna.
He does not expect large outflows from money market, basically the inflows have stopped because the limits are full. Potentially one could see both the current account and fiscal deficit go up, which is a bit of a concern, said Khanna, adding that in a worst case scenario there is potential for some money to go out but don’t see large outflows from money market given the way things are.
Avoiding giving levels, he said the bias at this point is for a bit more rupee weakness.