Indian rupee falls second time in two weeks

[rockstarIN]

I expect 62-64 levels in 5-6 months

 

[Marxist]

Manmohan and company is Destroying the country

 

[Azazel]

Something is going on inside India that they are not letting people know.

Not really,Today's bloodbath in Stock market is due to the strong US job numbers and rise in oil price rise due to unrest in Egypt.The current trend is likely to continue for some time.

 

[Pulsar]

Normally you would think that a falling currency would improve your Trade balance.

But for some reason, India's Trade balance is only becoming worse and worse?

And it's not just gold imports that are pulling it down, India's exports themselves are falling too.

Ok, so India is going into the hell hole and becoming a failed state whereas China is galloping ahead and has reached the pinnacle of perfection in all fields.

Happy? Now go blow your trumpet somewhere else. Chinese ego trips are becoming a little tiring.

 

[Chinese-Dragon]

Ok, so India is going into the hell hole and becoming a failed state whereas China is galloping ahead and has reached the pinnacle of perfection in all fields.

Happy? Now go blow your trumpet somewhere else. Chinese ego trips are becoming a little tiring.

Wow, what an emotional overreaction.

My post was purely based on logic. Normally when a currency goes down, people expect exports to improve. But for some reason, it is not happening in this case.

I explained why that might be, in my follow up post.

 

[cirr]

wow。。。this is the so-called world's largest democrasy where even the circulation of financial analyses are not allowed。

Panic in the face of ceaseless fall in the value of the rupee。

RBI wants curb on rupee forecast by bankers

July 08, 2013 10:43 IST

Despite the various steps taken by the central bank, the pressure on the rupee has continued, which is mainly due to global factor

Whether by communicating or by curtailing communication, the Reserve Bank of India (RBI) is taking all unconventional steps to arrest the fall in the rupee.

In its latest move, RBI has told treasury officials of banks to not give rupee forecasts against the dollar – particularly to the media, analysts and in their reports. It affects market sentiments to a larger extent, particularly in a situation when rupee trading is volatile, it says.

“RBI does not want treasury officials to give rupee forecasts because it affects so many stakeholders. It also makes the market nervous,” said the treasury head of a public sector bank.

RBI has been concerned because the rupee has weakened by 12 per cent since the start of this financial year, and forecasts that say the rupee would weaken further, act as a dampener.

Many publications routinely carry out polls on several market-related issues including the level of rupee against the dollar in a particular timeframe, expectation from RBI policy, monthly inflation and index of industrial production figures.

Last month, the central bank has unexpectedly released the current account deficit (CAD) data of the January-March session before it was scheduled to be released. The move was interpreted as being one to calm nerves, as the rupee had hit an all time low against the dollar the previous day. The ploy yielded results, at least for a shorter span, as the rupee stabilised for the next few days as the fourth quarter CAD figures were better than expected.

The central bank’s hand is tied so far as using its foreign exchange reserves are concerned as the $285- billion kitty can only cover six and half months of imports.

Despite the various steps taken by the central bank, the pressure on the rupee has continued, which is mainly due to global factors that have made investors shift towards the dollar in a uncertain environment. The rupee is expected to further weaken in the coming week too.

On the back of encouraging data on US non-farm payrolls, the rupee is expected to weaken this week on concerns the US Federal Reserve might start pulling back its bond-buying programme soon. According to a treasury head of a private bank, the rupee might even touch a new all-time low, closer to 61.25, on Monday.

Foreign institutional investors (FIIS) have been selling domestic debt in a scenario when US treasuries are becoming more attractive. It is expected that FIIs would continue to sell domestic debt even this week on the back of recovery in the US economy.

On Friday, the rupee ended at 60.24 a dollar, compared with the previous close of 60.13. During intra-day trades, it touched a high of 60.01 and a low of 60.59, a level very close to its all-time low of 60.77 last month.

RBI on Friday, intervened in the foreign exchange market and sold dollars to help the weakening rupee. According to dealers, if the central bank had not done so, the rupee would have touched a new all-time low on Friday itself.

 

[Omtatsat]

The Current Account Deficit is just not sustainable. Indian economy is riding a tiger and the FM is resorting to increasingly desperate measures to plug the CAD. It is a simple arithmetic - you import more than you export, your currency is gonna have it in the long run - no exceptions. Gold and petroleum imports are rising and exports are falling. Hence this desperation to have FDI in everything - retail, real estate, defense, telecom -- so that the critical dollars keep coming.

 

[cirr]

Wow, what an emotional overreaction.

My post was purely based on logic. Normally when a currency goes down, people expect exports to improve. But for some reason, it is not happening in this case.

I explained why that might be, in my follow up post.

You are assuming that India produces anything that are highly sought after in a world market getting increasingly competitive now a days。

 

[TopCat]

Crossed 62 rupees!!! I guess it will cross 70 rupees soon!!

 

[Omtatsat]

wow。。。this is the so-called world's largest democrasy where even the circulation of financial analyses are not allowed。

Panic in the face of ceaseless fall in the value of the rupee。

RBI wants curb on rupee forecast by bankers

July 08, 2013 10:43 IST

Despite the various steps taken by the central bank, the pressure on the rupee has continued, which is mainly due to global factor

Whether by communicating or by curtailing communication, the Reserve Bank of India (RBI) is taking all unconventional steps to arrest the fall in the rupee.

In its latest move, RBI has told treasury officials of banks to not give rupee forecasts against the dollar – particularly to the media, analysts and in their reports. It affects market sentiments to a larger extent, particularly in a situation when rupee trading is volatile, it says.

“RBI does not want treasury officials to give rupee forecasts because it affects so many stakeholders. It also makes the market nervous,” said the treasury head of a public sector bank.

RBI has been concerned because the rupee has weakened by 12 per cent since the start of this financial year, and forecasts that say the rupee would weaken further, act as a dampener.

Many publications routinely carry out polls on several market-related issues including the level of rupee against the dollar in a particular timeframe, expectation from RBI policy, monthly inflation and index of industrial production figures.

Last month, the central bank has unexpectedly released the current account deficit (CAD) data of the January-March session before it was scheduled to be released. The move was interpreted as being one to calm nerves, as the rupee had hit an all time low against the dollar the previous day. The ploy yielded results, at least for a shorter span, as the rupee stabilised for the next few days as the fourth quarter CAD figures were better than expected.

The central bank’s hand is tied so far as using its foreign exchange reserves are concerned as the $285- billion kitty can only cover six and half months of imports.

Despite the various steps taken by the central bank, the pressure on the rupee has continued, which is mainly due to global factors that have made investors shift towards the dollar in a uncertain environment. The rupee is expected to further weaken in the coming week too.

On the back of encouraging data on US non-farm payrolls, the rupee is expected to weaken this week on concerns the US Federal Reserve might start pulling back its bond-buying programme soon. According to a treasury head of a private bank, the rupee might even touch a new all-time low, closer to 61.25, on Monday.

Foreign institutional investors (FIIS) have been selling domestic debt in a scenario when US treasuries are becoming more attractive. It is expected that FIIs would continue to sell domestic debt even this week on the back of recovery in the US economy.

On Friday, the rupee ended at 60.24 a dollar, compared with the previous close of 60.13. During intra-day trades, it touched a high of 60.01 and a low of 60.59, a level very close to its all-time low of 60.77 last month.

RBI on Friday, intervened in the foreign exchange market and sold dollars to help the weakening rupee. According to dealers, if the central bank had not done so, the rupee would have touched a new all-time low on Friday itself.

Its all Chiddu's doing. He thought he is too smart. import like there is no tomorrow and meet the CAD through hot money coming in the stock market. Unfortunately, it cant continue forever. So now the more desperate measures to get FDI by opening retail, telecom...what not. India is going to have it in the coming days.

 

[Marxist]

Crossed 62 rupees!!! I guess it will cross 70 rupees soon!!

it wont stop in 70 may be more Wait till Food Security Bill comes

 

[TopCat]

The Current Account Deficit is just not sustainable. Indian economy is riding a tiger and the FM is resorting to increasingly desperate measures to plug the CAD. It is a simple arithmetic - you import more than you export, your currency is gonna have it in the long run - no exceptions. Gold and petroleum imports are rising and exports are falling. Hence this desperation to have FDI in everything - retail, real estate, defense, telecom -- so that the critical dollars keep coming.

India always had a trade deficit and not the reason why Rupee was falling.
You rode on hedge funds and bonds for rapid expansion which lost its steam. People already made enough money on dumb Indians (who were made believe a supa powa) and now time for them to withdraw profit and go home. The end result, India does not have enough FC to pay off its obligation and heading towards PK situation.

 

[cirr]

The Current Account Deficit is just not sustainable. Indian economy is riding a tiger and the FM is resorting to increasingly desperate measures to plug the CAD. It is a simple arithmetic - you import more than you export, your currency is gonna have it in the long run - no exceptions. Gold and petroleum imports are rising and exports are falling. Hence this desperation to have FDI in everything - retail, real estate, defense, telecom -- so that the critical dollars keep coming.

The sky-high inflation level is another factor driving down the value of the rupee。

High inflation -》 high interest rates -》 slowing growth -》 outflow of foreign capitals -》falling rupee -》higher import bills -》higher CAD -》lower productivity -》high inflation。。。。

 

[TopCat]

The sky-high inflation level is another factor driving down the value of the rupee。

High inflation -》 high interest rates -》 slowing growth -》 outflow of foreign capitals -》falling rupee -》higher import bills -》higher CAD -》lower productivity -》high inflation。。。。

All Asian tiger rode on high inflation at the time of take off... Some point in economic expansion you need to allow inflation to adjust paper economy.
Indian case different that I explained earlier.

 

[Omtatsat]

India always had a trade deficit and not the reason why Rupee was falling.
You rode on hedge funds and bonds for rapid expansion which lost its steam. People already made enough money on dumb Indians (who were made believe a supa powa) and now time for them to withdraw profit and go home. The end result, India does not have enough FC to pay off its obligation and heading towards PK situation.

Its not the trade deficit but the CAD which is responsible. While trade deficit was always there, it was bridged by NRI remittances and lately by hot money and some FDI. The FDI targets did not materialize, hot money is fleeing and the result is for all to see.