A poll conducted by Business Standard of 17 banks, corporate treasurers and consultants revealed that the rupee would weaken to 43.50 to 44.50 in three months. The sample included three public sector banks, nine foreign banks, three private banks and two corporate treasurers and consultants.
Standard Chartered Bank predicted a fall to 44 per dollar. "There is strong demand which should take time to ease," said Inderbir Singh, area manager - treasury, West at the bank. "There are more buyers than sellers," he added.
Kalyan Mukherjee of Credit Agricole Indosuez placed the rupee at 43.50. "The rupee is under pressure because of the internal & external conditions _ a recent phenomenon. As long as the weakness is warranted by economic conditions it is acceptable so long as orderly market conditions are maintained," Mukherjee said.
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He added the rupee's fortunes were linked to the performance of other emerging currency markets, particularly the yen, the rouble, and the yuan. He assigned a 25-30 per cent weightage to external factors.
Sunil Sharma, chief dealer at ANZ Grindlays Bank, predicted a drop to 44. "I don't foresee any great change in the underlying demand-supply situation as the usual trade and other requirements are there, but supplies are drying up, particularly following the sanctions and credit downgrade," he said.
A public sector bank placed the rupee at 44 and stated the worsening balance of payments situation points as the main reason for the rupee's weakening bias.
Indusind bank placed the rupee at 43.5 in three months. J Moses Harding, assistant vice president and forex head at the bank said, while the RBI package provide some respite for the rupee, tension over the Asian markets could keep up the pressure.
K N Dey, senior vice president at forex consultant Mecklai Financial and Commercial Services, said the rupee may range between 43 and 44.50. "Political uncertainty and tension in emerging markets multiply into a bearish sentiment," he said.
N Paramasivam, corporate treasurer for the Essar Group predicted a drop to 43.60.
"The news that Chinese official won't devalue yuan, and the recoveries seen in Asian countries are also giving rise to hope that external concern is limited," he said.
HDFC Bank placed the rupee in the 42.75-43.25 band under normal market conditions. "The immediate effect of the measures have been positive. The only catch is the impact on liquidity. Money should not become so tight that banks are forced to raise lending rates," said Shailendra Bhandari, executive director & Treasurer, HDFC Bank.