"How the exchange rate moves forward is dependent on many things. How much of the oil demand comes back to the market, how the tapering moves or doesn't move..," Kochhar told reporters on the sidelines of the annual Bancon meeting here.
She also said that rather than worrying about factors like the fate of US tapering, it is important for India to improve its growth prospects and gain the confidence of global investors in a better way.
"More than tapering, we need to focus on creating confidence in our growth model. Whatever dollars are available in the global markets, there is always some amount of investment which is keen to come to the country. They will come provided they have confidence in growth going forward," she said.
The rupee had fallen to all time low of 68.85 against the US dollar on August 28. It has gained since then. Yesterday, it appreciated 19 paise to 63.11 against the dollar. The Reserve Bank has taken some steps to shore up the domestic currency.
On the special FCNR (B) deposit scheme, launched by RBI on September 4, she said it is a positive step that has helped the battered rupee. The window is scheduled to close by the end of the month, but some analysts say that the central bank may extend it to attract more funds and build reserves.
On Wednesday, RBI Governor Raghuram Rajan had said the NRI scheme along with the special dollar swap for banks had already net USD 18 billion. Alhough the government and RBI have not put a target for these windows, around USD 25 billion inflows are expected from these windows by November 30.
Kochhar said that going ahead the movement of the rupee will not be dependent on the fate of these windows but other factors, including the demand from oil marketing companies which are gradually returning to the market and the fate of the long expected tapering of the US Fed's liquidity infusing quantitative easing programme.
US Fed has been buying bonds worth USD 85 billion every month under the programme to stimulate the US economic growth and has impacted investor confidence globally. On the domestic front, the three state-run oil companies need around USD 9 billion every month to meet import bills.
When asked if the bank is contemplating a deposit rate revision, Kochhar said some banks in the system have taken such a call following the last RBI hike in key rates, and ICICI Bank is monitoring the situation. It has, however, not taken any decision on a review yet.
She said the recent rainfall has increased the likelihood of some cooling in food prices which can have a positive bearing on the retail inflation numbers, but the long-term solution lies in urgent steps to augment supplies.
Meanwhile, Aditya Puri of rival HDFC Bank said the spike in the headline inflation was a "surprise" and attributed it to low base effect and pressure from fuel price hikes. While Consumer Price Index based inflation crossed 10 percent in October, the one base on Wholesale Price Index rose to an eight-month high of 7 percent in the month.
Puri exuded confidence that the country will get upwards of USD 20 billion through the FCNR (B) scheme.