Public RelationsRupee to strengthen in coming days: ICICI Prudential
The rupee is expected to appreciate in the near future, a leading mutual fund industry official said.
- Re rises by 13 paise at 48.75 a $ in opening trade - Re rises by 3 paise to 48.88 a $ in opening trade - Re down 15 paise at 49.18 a $, hits 1-1/2 month low - Re rises by 9 paise to 48.73 a dollar in opening trade - Re down by 24 paise at 48.89 a $ in early trade - Re appreciates by 11 paisa vs $ in early trade
"The rupee is expected to strengthen in the coming days backed by strong capital flows — only capped to the tune of how much the RBI wants to shore up the country"s forex reserves," ICICI Prudential Asset Management"s Deputy Managing Director and Chief Investment Officer Nilesh Shah said at the Antique India Markets Conference 2009 here today.
The rupee was trading strong at 48.73 against the dollar on Monday.It is difficult to predict the future but the climate is favourable for the rupee to appreciate, Shah said.
The rupee may range between Rs 47-49 and likely not cross Rs 50 in the short-run," Central Bank of India"s Executive Director Arun Kaul said.
Commenting on the interest rate scenario, Shah said that in the short-run interest rates may come down, but eventually it could go up.
The size of the government"s borrowing programme was large. But now with the pace of the borrowing programme slowing down and liquidity remaining quite robust, one could see interest re-emerging on government security, Shah said. Interest rates may remain soft in the short-term, Yes Bank"s Managing Director & CEO Rana Kapoor said.
Going ahead, inflation would keep pressure on interest rates, Kaul said.
Earlier, ICICI Bank"s Chairman, K V Kamath, said that the government should make known its measure to bridge the fiscal gap as this would help ease interest rates.
Currently, the availability of liquidity is good, so that does not warrant the sort of yields which are being seen, he said.
Kamath suggested that the government should articulate more boldly its maximum capacity of raising funds through disinvestment of state-owned companies, which can boost gilt traders" confidence.