Re may fall more after Fed’s move to put off QE3

MUMBAI: The rupee is likely to slide further in response to the US Federal Reserve chairman’s speech at Jackson Hole, Wyoming, say currency dealers.

Fed chief Ben Bernanke put off a widely expected third round of quantitative easing, or QE3, while hinting at “a range of tools that could be used to provide additional monetary stimulus” that will be discussed at the Fed’s next meeting on September 20-21.

“Tools are limited. QE2 has had a marginal impact and I don't think there will be a QE3. I think the dollar will return to strength, but can't say by how much.

The rupee may weaken beyond Rs 46.50. A year from now, the dollar will be quite strong,” said Jamal Mecklai, CEO of risk advisory firm Mecklai Financial.

Quantitative easing is a monetary policy measure that injects money into a sagging economy, usually achieved by the central bank buying assets.