INDIAN Rupee at all-time closing low, slumps to 53.97 against dollar

[Imran Khan]

Rupee at all-time closing low, slumps to 53.97 against dollar
Reuters, 14 May 2012 | 05:15 PM

Video
April WPI higher than estimates, weaker rupee a concern: Experts
14:17

The rupee on Monday closed at a new provisional record closing low of 53.9750 to the dollar as global risk aversion spiked and as higher-than-expected domestic inflation data hit stocks by lowering expectations for future rate cuts.



The rupee came very close to falling below the psychologically key 54-level and ended not far from the record low of 54.30 hit in mid-December.




Earlier in the day, four dealers said the Reserve Bank of India (RBI) likely sold dollars via state-run banks as the rupee approached its five-month low.



Traders said the RBI likely sold dollars from 53.90 rupee levels. At 2:58 p.m., the rupee was trading at 53.80/81 to the dollar.



The rupee hit 53.95 to the dollar on May 4; a breach would make the currency test its all-time low of 54.30 seen in mid-December.



A weak euro, which was hovering near four-month lows, and demand from oil importers were weighing on the rupee, these dealers said.


Rupee at all-time closing low, slumps to 53.97 against dollar

 

[danger007]

is this news makes you happy.....

 

[kawaraj]

I remember the "Don't panic" thread.

I would say this is just a beginning of a major decline, if any members here has a substantial position in deposit or investment in currency trade, take dollars, sell Rupees, for portfolio safety reason.

 

[kawaraj]

I remember the "Don't panic" thread.

I would say this is just a beginning of a major decline, if any members here has a substantial position in deposit or investment in currency trade, take dollars, sell Rupees, for portfolio safety reason.

I would bet it's to 60 by the fall.

Reason is, Negatives come in droves, they are accompanied by hedgefunds sellout, Rating agency consfiracies, etc. Yet the economy still has a lot of downside to report in the months ahead.

Even Indian incs are facing downgrade,

http://timesofindia.indiatimes.com/...s-LIC-outlook-stable/articleshow/13135646.cms

 

[Airway]

its for such time not for long time coz revserve bank helps to reverse strong against dollar within 15 days

 

[kawaraj]

NEW DELHI: Credit ratings agency Moody's Investors Service on Monday downgraded the state-run Life Insurance Corporation of India (LIC) to the lowest investment grade, in line with the sovereign ratings, due to the firm's high exposure to government debt.

 

[Chinese Century]

Everyone is not doing well including china but seriously Indian economy is in dire straits. Indian inflation is very high, currency is collapsing and twin deficits are getting out of control. Other Asian countries have slowing growth but India is pretty much facing economic collapse if this goes on. Indian policy makers don't have any room to maneuver.

This is a good lesson to any country that has debt based consumer economy, you can grow by going into debt for only so long, then you face the consequences.

India is becoming the new Greece. Infact the way things are going, India could be the new argentina or Zimbabwe. Hyperinflation cannot be ruled out, once the currency starts to collapse it can collapse very quickly. India needs to be a manufacturing and exporting nation and rely less on services and debt based consumption.

 

[Chinese Century]

Everyone is not doing well including china but seriously Indian economy is in dire straits. Indian inflation is very high, currency is collapsing and twin deficits are getting out of control. Other Asian countries have slowing growth but India is pretty much facing economic collapse if this goes on. Indian policy makers don't have any room to maneuver.

This is a good lesson to any country that has debt based consumer economy, you can grow by going into debt for only so long, then you face the consequences.

India is becoming the new Greece. Infact the way things are going, India could be the new argentina or Zimbabwe. Hyperinflation cannot be ruled out, once the currency starts to collapse it can collapse very quickly. India needs to be a manufacturing and exporting nation and rely less on services and debt based consumption.

 

[3Idiots]

The long term exchange rate should be guided by the inflation differential between USA and India (.. USA because we talking about USDINR).

Similarly, in the long term EURINR should be guided by inflation differential between EU and India.

These countries have close to 0% inflation, while India maintains 5-8% on average.

The only disadvantage of inflation is that it adds noise to "price signals" vital to run a market economy. Economist believe a moderate level of inflation is best suited for growing economies (instead of a near 0% inflation).

INR in 1991: 25
INR in 2012: 53

Annualized compounded depreciation: 3.6%

It's less than the inflation differential because India has a PPP factor of over 4 against USD. Hence, India can afford a higher inflation than the depreciation rate of the rupee (and meanwhile PPP factor corrects gradually, towards an ideal 1).

.. what matters is the real growth rate (which is unaffected by either inflation or exchange rate).

In fact, China underwent a massive depreciation of 11% per annum compounded, between 1984 and 1994

CNY depreciated 11% every year, CNY in 1984 = 2.93 and CNY in 1994 = 8.6

Ditto for Korean Won (KRW).

Letting the markets operate freely is better .... if anything, it's already undoing and killing low quality but cheap imports from china (led by the historical devaluations of CNY).

 

[ashokdeiva]

I will take this piece of a news on a +ve note, reasons. some of the Government polices has made sure that Forign investors are not the sole reason that our exchanges are industries are ment for and this announcement by Pranab ji is a sign to the INDIANS that the Indian Government and its buracrats take the Indian Investors like me and many others as the long term investors and not the Forigners who make quick buck in the short selling market.
2) The Global economy is at bleak and coupled with INDIAN policies it will obviously result in alternative investment in the curreny market other than the INDIAN RUPEE, though this back fires in a short term, I am sure It will benifit the nation in a long term.

 

[Great Sachin]

I remember the "Don't panic" thread.

I would say this is just a beginning of a major decline, if any members here has a substantial position in deposit or investment in currency trade, take dollars, sell Rupees, for portfolio safety reason.

I would bet it's to 60 by the fall.

Reason is, Negatives come in droves, they are accompanied by hedgefunds sellout, Rating agency consfiracies, etc. Yet the economy still has a lot of downside to report in the months ahead.

Even Indian incs are facing downgrade,

Moody's downgrades LIC, outlook stable - The Times of India

In 1990 when India's economic condition was worst then ever...Rupee was 17 against a dollar.....
When India was doing best ever in 2004...Rupee was near 50 a dollar.....

So I am not worried at all...India is rocking and these ups and downs are part of the game...

You guys should worry about yourself....things are going only in one direction for you...down ....

 

[Rajaraja Chola]

india is done. The rupee is worthless. indians will soon stop using rupee to trade, but use gold instead. Then, goi will force all hindu temples and private individuals to exchange their gold for "gold certificates"

"Shining india" was just a big lie right from the beginning. All the numbers from india were fake in the first place!

Look at MMRCA. You've been boasting about it since 2006, and now you are bankrupt.

Ok megatonne Fart...
You dont need to feed us....

 

[shuttler]

Everyone is not doing well including china but seriously Indian economy is in dire straits. Indian inflation is very high, currency is collapsing and twin deficits are getting out of control. Other Asian countries have slowing growth but India is pretty much facing economic collapse if this goes on. Indian policy makers don't have any room to maneuver.

This is a good lesson to any country that has debt based consumer economy, you can grow by going into debt for only so long, then you face the consequences.

India is becoming the new Greece. Infact the way things are going, India could be the new argentina or Zimbabwe. Hyperinflation cannot be ruled out, once the currency starts to collapse it can collapse very quickly. India needs to be a manufacturing and exporting nation and rely less on services and debt based consumption.

dont tell them about that. indians are proud of their service industry and they say they can grow their economy by internal consumptions.

they even mock at our export driven economy!

 

[dzgame]

dont tell them about that. indians are proud of their service industry and they say they can grow their economy by internal consumptions.

they even mock at our export driven economy!

well indian service industries charge in dollars when they consider an offshore project..(mostly in US)...i guess they are earning more profit when they convert the dollars into indian currency..correct me if i'm wrong! i'm not an expert...just thinking..

 

[shuttler]

And several days ago, RBI gave this ORDER:



http://www.defence.pk/forums/world-affairs/179561-rbi-ordered-exporters-sell-dollars-give-rupee-leg-up-2.html#post2929281

well indian service industries charge in dollars when they consider an offshore project..(mostly in US)...i guess they are earning more profit when they convert the dollars into indian currency..correct me if i'm wrong! i'm not an expert...just thinking..

yes only if they convert usd to rupees but most indian companies operating in us have their own usd bills to settle and also they need to maintain usd liquidity; that means not all earnings are converted and the total amount may not be enough to salvage the dip.