• Saturday, May 27, 2017

Skidding Rupee Hits Record Low Against Dollar

Discussion in 'World Affairs' started by aimarraul, Nov 24, 2011.

  1. aimarraul

    aimarraul SENIOR MEMBER

    Messages:
    2,779
    Joined:
    Jun 27, 2008
    Ratings:
    +0 / 3,623 / -0
    Skidding Rupee Hits Record Low Against Dollar .
    By SHEFALI ANAND And SUDEEP JAIN

    The Indian rupee tumbled to an all-time low against the dollar Tuesday as jitters about the economy were compounded by fear that the central bank's largely hands-off approach to the currency leaves it more room to fall.

    At one point the dollar bought 52.72 rupees, easily surpassing the previous record of 52.1950 rupees, hit during the financial-crisis days of March 2009, according to Reserve Bank of India data. In midday New York trading Tuesday, the dollar was at 52.49 rupees, up from 51.236 late Monday.

    The currency has been Asia's worst performer against the dollar this year, down more than 17%..

    The rupee has been plagued by a combination of a lower risk appetite among global investors, spooked by the European debt crisis, and pessimism about the Indian economy. Growth expectations for the year ending March 31 are now at around 7% to 7.5%, compared with earlier government targets of 9% to 9.5%. And India continues to suffer from an inflation rate of around 10%, despite a 20-month campaign of interest-rate increases by the central bank.

    With foreign investors staying away, the flow of dollars into the country has dried up in recent months. Foreign institutions have put a net $4.48 billion into Indian bonds and stocks this year, compared with $39.06 billion over the same period last year.

    Meanwhile, the import bill, primarily for oil, has been rising, widening the trade deficit. For the April-June quarter, total imports were up 5.4% from the quarter before, and exports were down 1.2%. That has caused a jump in the current-account deficit, or the trade deficit plus interest payments and other transfers. The current-account deficit rose to $14.1 billion in the April-June quarter, more than twice its level of the previous quarter.

    While other Asian countries' central banks typically intervene to bolster their currencies in times of weakness, the Reserve Bank of India has largely been absent.

    "Very clearly, they haven't been protecting a level" for the rupee, said Anindya Das Gupta, managing director at Barclays Capital.

    Increasingly concerned about a further fall in the currency, importers in recent days have started accumulating dollars, in turn weakening the rupee.

    On Tuesday, Reserve Bank Deputy Governor Subir Gokarn said that while the bank doesn't have a target, it does view the rupee's sharp depreciation as a problem, since it could fuel inflation. Still, he didn't suggest aggressive intervention was imminent.

    "Any action we take now, if any, has to take into account the fact that these actions might have consequences a little further down the road," he told reporters on the sidelines of a conference in Mumbai. "So we've got to balance out actions now with risks or a potential increase in vulnerability later on."

    Finance Minister Pranab Mukherjee played down the effect that central-bank intervention could have, saying it might be different if local factors rather than global uncertainties were the main drivers of the rupee's decline. "Unless the international situation improves, there is a risk," he told reporters.

    A senior government official told Dow Jones Newswires that the central bank is likely to take some steps to help state-run oil importers, which are hit hard by the falling rupee. Details weren't available as of late Tuesday.

    Analysts say there are no quick solutions to the rupee's problems.

    "The worst is not over," said Tamara Mast Henderson, a Singapore-based foreign-exchange strategist with ANZ Banking Group Ltd.

    —Abhrajit Gangopadhyay, Nupur Acharya and Mukesh Jagota contributed to this article.
     
  2. Jon Snow

    Jon Snow FULL MEMBER

    Messages:
    660
    Joined:
    May 6, 2010
    Ratings:
    +0 / 285 / -0
    Good news for me (and other NRIs)
     
  3. Skyline

    Skyline SENIOR MEMBER

    Messages:
    3,640
    Joined:
    Jan 8, 2011
    Ratings:
    +0 / 2,632 / -0
    Country:
    Sri Lanka
    Location:
    Sri Lanka
    You will have to spend more money on imports, SL also devalued SLR by 3% it will effect for Oil prices soon!
     
    • Thanks Thanks x 1
  4. jbgt90

    jbgt90 ELITE MEMBER

    Messages:
    8,796
    Joined:
    Aug 12, 2010
    Ratings:
    +5 / 10,225 / -0
    Country:
    India
    Location:
    India
    a lot of NRI are sending their money back to avail this boon . good for them .
     
  5. isro2222

    isro2222 FULL MEMBER

    Messages:
    1,534
    Joined:
    Nov 17, 2011
    Ratings:
    +0 / 1,526 / -5
    Great news. Infact i was worried at one point when i saw rupee getting stronger against dollar. NRI's will benefit. More money will come in india.... Buying weapons would be costly (seems chinese indirectly pointing out) but it would be balanced by NRI's money that will come to india. India had 9.5 percent growth when rupee was weak against dollars.... Now india slowly increased export too. China manipulated its currency for benefits but india didnt even had to manipulate it. Great news for I.T sector too....
     
  6. Hafizzz

    Hafizzz SENIOR MEMBER

    Messages:
    5,026
    Joined:
    Jun 28, 2010
    Ratings:
    +0 / 3,479 / -0
    good. those US F-35 will cost a lot more for india.
     
  7. BLUE_ Pheonix

    BLUE_ Pheonix BANNED

    Messages:
    116
    Joined:
    Nov 23, 2011
    Ratings:
    +0 / 45 / -0
    someone burning here..yar jalne ki had hoti hai :flame::flame:
     
  8. Ajaxpaul

    Ajaxpaul SENIOR MEMBER

    Messages:
    3,429
    Joined:
    Apr 19, 2011
    Ratings:
    +0 / 2,804 / -5
    And the US transferred the technology to build F-22 fighters to India...lolz
     
  9. ChinaToday

    ChinaToday SENIOR MEMBER

    Messages:
    4,449
    Joined:
    Jan 31, 2011
    Ratings:
    +0 / 5,017 / -2
    Country:
    China
    Location:
    United Kingdom
    Good for oversea indians bad for india indians
     
    • Thanks Thanks x 1
  10. mastaan

    mastaan FULL MEMBER

    Messages:
    644
    Joined:
    Mar 30, 2011
    Ratings:
    +0 / 1,492 / -0
    Country:
    India
    Location:
    Germany
    I know, i know, there is no point replying to you, because you will still not stop oozing your bile irrespective of what I say... But here is still a lame attempt...

    First, India is not buying F 35s... Then, Indian contracts will come with a 50% offset clause, which means, Rupee expenses and Rupee purchases... Plus, any purchases that you will do today, will be shipped in 3-8 years period... Enough time for multiple rounds of currency fluctuations... International trade does not stop because of these wild swings... They go away with the speed that they came... It definitely leads to problems for borrowers of international markets and importers, but you will find that suddenly the IT sector and other export sectors, which support the increasing middle class of India, will suddenly start earning more, thus becoming able to give out more money in terms of bonuses and new recruitments... Just like every coin, this has pros and cons... we should look at both... But when was the last time, you were objective about something that had 'India' written on it?
     
  11. arcane

    arcane BANNED

    Messages:
    321
    Joined:
    Nov 22, 2011
    Ratings:
    +0 / 110 / -0
    no limits of trolling.....
     
  12. Abhishek_

    Abhishek_ BANNED

    Messages:
    5,405
    Joined:
    Aug 18, 2010
    Ratings:
    +0 / 5,130 / -5
    Country:
    India
    Location:
    Taiwan, Province Of China
    im sending funds back home as well. indian banks are offering much better interest rates than US.
     
  13. Alchemy

    Alchemy FULL MEMBER

    Messages:
    1,108
    Joined:
    Sep 27, 2011
    Ratings:
    +0 / 661 / -0
    This is a good news for Indian Exports and Indian exporters
     
  14. oct605032048

    oct605032048 SENIOR MEMBER

    Messages:
    2,973
    Joined:
    Jul 8, 2009
    Ratings:
    +0 / 2,015 / -0
    A bad news for the importers. You don't have much oil in India.

    ---------- Post added at 04:51 PM ---------- Previous post was at 04:51 PM ----------

    No matter it is a good news or bad news, apparently there is nothing your central bank can do about it.
     
  15. arcane

    arcane BANNED

    Messages:
    321
    Joined:
    Nov 22, 2011
    Ratings:
    +0 / 110 / -0
    and why are u telling us this????