The declining rupee will stabilise soon amid inflows of up to $25-30 billion through the forex swap windows, and currency punters are likely to suffer heavy losses, Economic Affairs Secretary Arvind Mayaram said here on Tuesday.
“I think a crazy, irrational kind of a sentiment is (prevailing in the forex market)... Whoever is punting on rupee will lose very heavily. I feel very sorry for their families,” Dr. Mayaram told reporters here.
Referring to the special swap windows, Dr. Mayaram said “(inflows) could cross $25-30 billion by the end of it (November 30, when swap windows close),” and the rupee would stabilise soon.
The rupee, on Tuesday, declined for the fifth day in a row, and closed at 63.71 against the dollar, down 47 paise over the previous close.
Meanwhile, Finance Minister P. Chidambaram held a meeting with foreign institutional investors (FIIs), who were ‘bullish’ on India.
After the meeting, Mr. Chidambaram said, “everyone was here, everyone was bullish, there were no concerns.” The meeting took stock of the current economic situation.
As for the inflows, until Monday, the Reserve Bank of India had received $17.5 billion through the special windows for swapping foreign currency non-resident (bank) deposits and overseas foreign currency borrowings by banks. To a query on the impact of the expected U.S. Federal Reserve’s withdrawal of its fiscal stimulus, Dr. Mayaram said, “When the taper begins, you will see nothing will happen."