Chinese devaluation of yuan to have sentimental impact on rupee: Jamal Mecklai

In an interview with ET Now, Jamal Mecklai, Mecklai Financial Services, shares his views on markets. Excerpts:

ET Now: What explains the currency weakness? We are already sub-64, has it got to do with some rub-off from the Chinese devaluation of their currency?

Jamal Mecklai: This is exactly what it is, otherwise it was all quiet. Rupee was moving between 63.50 and 64, but suddenly it jumped, so obviously it is directly linked to the event.

China is signalling that they have got a problem and they are trying to fix it, so there is going to be some continuing nervousness, in my view.

ET Now: Do you think today’s reaction in the currency market is largely sentimental?

Jamal Mecklai: Though the value of the Chinese currency is not going to drive the value of the rupee, the reaction is sentimental. The global situation is never completely comfortable and right now, there is a lot of nervousness in the world. People have been worried about China. Exports all over the world have not been rising, exports have, in fact, been falling in China.

China has acknowledged that they have problem. It is obviously going to precipitate, that is clearly what has happened to the rupee.