Rupee decline was partly aggravated this year in Q4 by a strong dollar, and part depreciation was cyclical, said Neeraj Gambhir, president of head treasury and markets at Axis Bank. Gambhir also said that some of the currency depreciation is cyclical.
The rupee fell for the sixth straight session and settled 32 paise down at 75.05 against the US dollar on Monday amid a lackluster trend in the domestic equities ahead of the release of key macro-economic data. Moreover, rising crude oil prices, foreign fund outflows, and spiking COVID-19 cases weighed on the domestic currency.
Speaking in an interview with CNBC-TV18, he said, “Some of it (the decline) is cyclical because typically the last quarter of the fiscal year is very heavy in terms of inflows and we see that reflected in the way rupee behaves during January-March period. This year it has been further aggravated by the fact that the dollar has been recently strong across most of the emerging market currencies and that’s getting reflected in the rupee as well.”
However, said Gambhir, I don’t see the rupee declining to below Rs 75.50-76 to the dollar. “I do not expect too much of depreciation in the rupee. We should see about Rs 75.50-76 level,” he said.
For entire interview, watch the video