We are unlikely to see a rate cut soon: Jamal Mecklai
People who have sterling exports could try to ride the market a little bit, says Mecklai.
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I do not see the rupee weakening very dramatically from here, at least not at this time, Jamal Mecklai, CEO, Mecklai Financial Services, tells ET Now.
Edited excerpts:
Vis-a-vis inflation data that was released yesterday, a lot of analysts have talked about nuances with regard to rural education, health and so on. What are some red flags which you have also observed which are not clear yet?
The truth is the central bank’s job is to be careful and are lots of short-term fluctuations in food prices for example. But again as we know with the election coming up, there is going to be a lot of spending. So chances are we are not going to see a rate cut right now. Market, of course, jumped on it and has pushed the rupee weaker. But again it has not moved much. I mean it moved yesterday quite a bit, but now it seems to have steadied.
In terms of red flags vis-à-vis inflation, there is oil. I do not know what happens when the six-month sanction waiver against Iran ends. That will be in March-April again. So lots of events creating uncertainty are coming for the market. I do not see the rupee weakening very dramatically from here, at least not at this time.
What would you say about Brexit? How important is that event for global currencies?
That is a big trick. I am just working on something over there. The sterling has already fallen quite a bit. It is quite low relative to its range since the start of Brexit. I am not sure there is that much room for it to fall and in any case everyone has sort of taken their positions. If at all, since everyone is expecting a terrible situation, market often moves in the opposite direction and you could see a bounce.
Edited excerpts:
Vis-a-vis inflation data that was released yesterday, a lot of analysts have talked about nuances with regard to rural education, health and so on. What are some red flags which you have also observed which are not clear yet?
The truth is the central bank’s job is to be careful and are lots of short-term fluctuations in food prices for example. But again as we know with the election coming up, there is going to be a lot of spending. So chances are we are not going to see a rate cut right now. Market, of course, jumped on it and has pushed the rupee weaker. But again it has not moved much. I mean it moved yesterday quite a bit, but now it seems to have steadied.
In terms of red flags vis-à-vis inflation, there is oil. I do not know what happens when the six-month sanction waiver against Iran ends. That will be in March-April again. So lots of events creating uncertainty are coming for the market. I do not see the rupee weakening very dramatically from here, at least not at this time.
What would you say about Brexit? How important is that event for global currencies?
That is a big trick. I am just working on something over there. The sterling has already fallen quite a bit. It is quite low relative to its range since the start of Brexit. I am not sure there is that much room for it to fall and in any case everyone has sort of taken their positions. If at all, since everyone is expecting a terrible situation, market often moves in the opposite direction and you could see a bounce.
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I would say people who have sterling exports could try to ride the market a little bit but again you need to be very careful and keep a stop loss because if it turns, it could turn very sharply as well. Even though there is not very much room, but then the sterling-dollar comes down and that gets multiplied by dollar-rupee and it all goes to hell.Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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