Nothing new in PM speech; key RBI moves awaited: StanChart

Prime Minister Manmohan Singh lashed out at the critics and asserted that investors had not lost faith in the country. He blamed domestic and external factors for rupee's steady decline and repeated his stance that India was not facing a 1991-like crisis. Fears of a major economic crisis have enveloped the country with rupee depreciating to new lows and market witnessing a freefall almost every day. 

Priyanka Kishore, Forex Strategist at Standard Chartered says that there was nothing new in the PM's speech that the market was unaware of. However, she feels that market will be looking forward to positive news from the RBI as Governor-designate Raghuram Rajan's has been supportive of external bond programme.

The reports on RBI postponing its policy date by two days; after the Federal Open Market Committee (FOMC) meeting, is a smart move to make appropriate announcements, adds Kishore.

Also read: Investors have not lost faith; 3% GDP fear unfounded: PM

Below is the edited transcript of her interview to CNBC-TV18.

Q: What did you make of the speech? For a rupee trader, was there any negative?

A: The Prime Minister (PM) did not have anything new that the market was not aware of. From rupee and market perspective, I do not think that it is the leading factor at this point of time.

Q: What are the other possible measures that you all are now speaking about that the Reserve Bank of India (RBI) could do to curb the volatility due to US Fed tapering?

A: There have already been reports that they have shifted back the RBI policy date to a couple of days after the Federal Open Market Committee (FOMC), which is a very smart move. It gives them time to react to the announcement comes from on that particular crucial September FOMC meeting.

There is a step-up in intervention in terms of price action already. It was much needed as in the past they have not followed their announcements with credible intervention action.  This is a welcome development from the RBI. We are already seeing reforms process by RBI going through.

I do not know how much of it is positive from a fiscal deficit perspective, but the parliament is working. From RBI's viewpoint, market is watching out for getting more dollars in the market.

The external bond issue continues to keep resurfacing and given that new Governor who will take up in a few days sounded supportive of such a bond in his previous role, market is looking forward to some positive announcement.

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