Mumbai, Sep 11( ) : Rupee will touch 60, this is the new mantra of the financial market.
A week back, the mantra was that the rupee would touch 70. The rupee termed as Asia’s worst performer has become the best performer since five days as steps to boost inflows and the US strike on Syria looks remote. The latest job data of US is not good enough for US Fed to reduce stimulus.
For the first time in four decades, the rupee did the best four-day rally as Reserve Bank of India Governor removed curbs on banks for fund-raising and for NRI deposits it gave exchange risk cover which is expected to bring in $20 billion in the next few weeks.
Yesterday, the rupee gained 2.2 % to be rated by Bloomberg as best performer out of the 189 currencies. This is in contrast to 68.84 low that it touched on August 28.
With Syria showdown being averted, the oil prices will cool down. RBI puts an option to banks to swap FCNR (B) dollar accounts for rupee at 3.5% and a three-year lock in period.
Analysts say that the trade deficit is coming down from $12.26 billion to $10.9 billion and gold imports down from $2.2 billion to $0.65 billion has strengthened rupee.
Oil companies after the RBI opening window to give dollars to it would reduce the monthly $9 billion bill to $1 billion. On September 20, the RBI policy review will be keenly watched as it is the first from Raghuram Rajan.
After US Fed hinted about tapering stimulus, the foreign investors pulled out $10.2 billion. Now, FII has $2 billion in short term and if this is pulled out, there is $5 billion remaining in long term.
FII has flowed around Rs 5000 crore into stocks in three days. Exporters who booked at Rs 69-70 are a confused lot. The export data for August shows an increase and this will further increase.