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The fortnight’s burning question. Is the weakening of the rupee the beginning of a longerterm trend?

Print Edition: June 15, 2008

The fortnight’s burning question. Is the weakening of the rupee the beginning of a longerterm trend?

No. Arun Kejriwal, Director, KRIS Capital
The recent spike in global crude oil prices has indirectly contributed to making the rupee cheaper against the dollar. But, I think a lot will depend on how the global markets perform. Also, General Elections are due in exactly a year, and this will determine currency movements in the coming months. However, I see dollar breaking the Rs 39 barrier over the longer-term.

Yes. T.K. Bhaumik, Chief Economist, Reliance Industries (RIL)
I think a number of factors are contributing to the weakening of the rupee. Rising crude prices mean that domestic oil companies will need more dollars to fund their purchases. This will trigger rupee sales and dollar purchases, weakening the value of the rupee. Other factors such as the global slowdown and rising inflation may also keep the rupee under pressure.

Maybe. G. Srivatsava, Head (Economic Policy), CII
It is very difficult to say where the rupee is heading. Global crude oil prices are touching new highs. This trend is expected to continue. Consequently, domestic oil companies are buying lots of dollars. Also, the FII pullout from the Indian debt market has put further pressure on the currency. But over the short term, everything will depend on the movement of crude oil prices.

Compiled by Manu Kaushik

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