'Re may turn weaker in next few months'

KOLKATA: The rupee may depreciate further against the dollar and hover between Rs 50 and Rs 53 in the next couple of months, according to HSBC director & head of corporate treasury sales, Sridhar Narayan. The rupee, which has depreciated over 28% since mid-2008, closed at 50.31 against dollar on Wednesday.'

���In the short-run of one or two months, the rupee may even depreciate further. But the long-term outlook for the rupee is positive,��� Mr Narayan said here on Wednesday at a seminar organised by Indian Chamber of Commerce (ICC). The senior banker said that in the near future, the outlook on rupee could be weighed down by the incidents like terrorist attacks and corporate governance issues. Mr Narayan, however, painted a rosier picture for the future.

���When the next turnaround happens, India is likely to be a better recipient of dollar inflows,��� he said, adding that the country might have seen the worst in terms of FII and FDI flows. ���As of now, external commercial borrowing has declined, while syndicated overseas loans have come to a grinding halt.���

Nevertheless, his suggestion to the exporter as well as importer communities is that everyone hedges their foreign exchange risk because ���even in good times, views go wrong���. He went on saying that corporates should follow a practice of policy-based hedging instead of view-based strategy.

While delivering his welcome address, CII president Sanjay Budhia said: ���Notwithstanding the global economic slump, developing economies including India are expected witness steady flow of remittance this year, which is a positive indicator.���

The World Bank has also forecast such a possibility.