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There is enough pressure for the RBI to do something unusual amidst sharp depreciation in the value of rupee, says Jamal Mecklai, CEO at Mecklai Financial Services, adding that he generally feels the sentiment is negative.

The Reserve Bank of India's decision last week to hike key policy rates by 40 basis points in an off-cycle meeting has surprised everybody.

However, Mecklai, in a telephone interview with IANS, said: "It was obvious that the US Fed was raising rates that particular night and if US policy rate goes up, the Indian rupee would come under pressure. So for several months, the RBI has been protecting the rupee and probably they feel the rupee has depreciated too much so let us take action to control it."

From here, where does the rupee go or will the tide turn or whether the RBI will be able to manage, he said "I don't know and nobody knows."

Here are some excerpts from the interview:

Q: Do you think RBI will intervene at this point or will wait for further depreciation?

A: They are intervening everyday. That is their job and they have to do that.

Q: What ammunition is available with the RBI for rupee's defence?

A: They can sell dollars from the forex reserves. Reserves have fallen by about $45-$50 billion, which is around 8-9 per cent of the total forex available with India. In 2008-09, the reserves had fallen by $50-$60 billion and that was about 20 per cent of the total and the rupee fell by 20 per cent. So the fact is that the crisis is not over and I don't exactly know what will happen.

But, it is not going to fall 20 per cent (now). But if it falls 6-8 per cent from 75 against the US dollar, it will cross the 80 mark.

Q: Will the RBI hike policy rate further in any off-cycle review or in tnhe next scheduled review?

A: They will certainly have to hike rates as the inflation is very high. They have started and they will continue with the hike.