THE chief economist of HSBC (Asia-Pacific), Mr Arup Raha, believes that rising Fed rates and high oil prices are a major concern today.

He adds that oil prices are likely to fall further. While the rupee is expected to remain steady, dollar is structurally weak and is likely to fall from its current levels, says Mr Raha.

Excerpts from CNBC-TV18's exclusive interview with Mr Raha.

How have things stacked up in the emerging markets and global equity markets?

As it has been a choppy time, negatives being oil prices and the Fed raising rates, the growth has been okay and that has kept everything fine.

Where do you reckon the Indian rupee is going?

The dollar is structurally weak, given the current account deficit and the amount that is required to finance it. Basically, it was the yield play that kept the dollar strong versus the euro. Not only is this about to end, but also it is potentially getting reversed, in that stage the dollar goes back to essentially acting like a structural currency with reduced yield. So, there will be potential dollar weakness.

The dollar has been strengthening all year and it is not that the rupee has weakened all year, but it is just that the real weakness has been recent. What has happened is that the current account deficit has been widening, and it requires financing. This will depend on what kind of portfolio inflows come in given that there is not any kind of inflationary pressure out there. It is a matter of portfolio inflows at this stage, and I think they should be strong and the rupee may get range-bound, but no fundamental weakness will be seen.

(This article was published in the Business Line print edition dated November 22, 2005)
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