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Rupee to see more new record lows over next few weeks, says Standard Chartered Bank

Updated : September 18, 2018 06:38:02 IST

The India rupee is expected to see new record lows over the next few weeks, said Devesh Divya, head, ASEAN and South-Asia, forex research of Standard Chartered Bank, adding that the pressure will increase on the domestic currency in near term.

“I think near-term there is definitely going to be more pressure on the rupee. I do think that we will probably see more new record lows over the next couple of weeks. However, by the end of the year, I do expect at least slight recovery in the rupee." said Divya.

On the market sentiment, Divya said, “Market expectations of the measures probably were too bullish. People were expecting a lot which was probably not warranted at this point. That is why there is a little bit of disappointment with the measures that were announced. In addition there was also news that US President Donald Trump is still going to go ahead with the USD 200 billion of tariffs on imports from China despite the news of talks earlier in the week. So I think combination of those factors, clearly rupee is likely to be under pressure as a result of that."

“When we talk about the dollar’s trajectory, we often look at three things for a potential turning point, valuation, positioning and catalyst. I think the first two are in place, dollar is quite overvalued, market positioning is long dollars but what we are missing here is a catalyst. There is no catalyst to turn the EM story or the dollar story around at this point," Divya added.
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