India's Rupee Hits New Low Against Dollar, Stocks Slump

[Chinese-Dragon]

Rubal and many iother currencies too has been affected and Chinese economy too has been affected

Sorry, the Chinese Yuan has been appreciating in value for the whole past decade, check any currency charts.

 

[IND151]

^^ I said economy and not currency

The world has grown used to the idea that China’s leaders are masterful stewards of their gargantuan economy. They steered brilliantly around the iceberg of the 2008 financial crisis, maintaining growth of near-double-digit rates. So when People’s Bank of China chief Zhou Xiaochuan began clamping down on excessive liquidity last week, some observers viewed him as a Chinese Paul Volcker. Now that the worst was over, Zhou seemed to indicate, it was time for China to rein in lending and prevent a credit bubble from swelling.
Then reality intervened. After the overnight repurchase rate zoomed to a record 13.91%, Zhou had to back off, hastily injecting fresh funds to stem the turmoil. The chaos traumatized money markets. Some were dismayed by signs that Zhou would end the era of easy money in China. Others feared that he couldn’t.

https://www.google.co.in/url?sa=t&r...OCYPE5ILNbeqRXK3qb5lGAQ&bvm=bv.48340889,d.aGc

U.S. stocks fell after Chinese equities entered a bear market on concern a cash crun
ch will hurt growth. Treasuries pared losses on speculation investors overreacted to a possible reduction of central bank stimulus.
The Standard & Poor’s 500 (SPX) Index sank 1.2 percent at 4 p.m. in New York, trimming an earlier drop of 2 percent. Ten-year Treasury note yields rose one basis point after earlier jumping to the highest level since 2011. The CSI 300 Index (SHSZ300) of China’s biggest companies tumbled 6.3 percent, the most since August 2009 and taking its drop from this year’s high to more than 20 percent. Copper fell to the lowest level in almost three years and aluminum extended the longest slump since 1987.

Richard Fisher, president of the Fed Bank of Dallas, said investors shouldn't overreact to the central bank’s plans to reduce the pace of asset purchases. China’s central bank said there’s a reasonable amount of liquidity in the financial system and urged banks to control risks from credit expansion, signaling no relief from a cash squeeze. The nation’s overnight repurchase rate is 6.47 percent, more than double this year’s average.
“Investors have been shaken by the concept of rising interest rates and a reduction in stimulus from the Federal Reserve, coupled with the uncertainty regarding effectively how robust the Chinese central banking system is,” Ethan Anderson, senior portfolio manager for Rehmann Financial in Grand Rapids, Michigan, said by phone. His firm manages about $1.5 billion. “We found ourselves in a headline-dependent environment, which is difficult for investors to function.”

 

[Star Wars]

The entire world economy is screwed.....nothing new here

 

[Chinese-Dragon]

@IND151 ^^^ I love how you've been constantly posting negative things about China's economy, even while the Indian rupee has fallen below 60.

A little self-reflection might be in order.

 

[IND151]

^^Many currencies are depreciating after the US Federal Reserve said it could start to reduce stimulus measures for the US economy

After all the boasting about surpassing China, the rupee has completely collapsed. India is on a death spiral and soon the government will seize gold from Indian households and Hindu temples to back the currency.

China Loses Control of Its Frankenstein Economy

https://www.google.co.in/url?sa=t&r...OCYPE5ILNbeqRXK3qb5lGAQ&bvm=bv.48340889,d.aGc

 

[Guest01]

The declining Rupee is only an indication of the lessening appetite for imports. Nothing wrong there. Less imports would not mean less consumption. Just means that imports will be replaced by increase in manufacturing within the economy. That is why RBI lets it slide. Except for Oil, nothing would get a direct impact. This will only make local manufacturing even more competitive in the long run and that will be good for the country. Why do you think that the Chinese wanted to keep an artificially weak Yuan?

 

[IND151]

@IND151 ^^^ I love how you've been constantly posting negative things about China's economy, even while the Indian rupee has fallen below 60.

A little self-reflection might be in order.

I just wanted to show that many economies and not just Indian have been affected by recent indication by US Federal Reserve that it could start to reduce stimulus measures for the US economy.

This is just for the India bashers and to show reality to many Indian members too, who think only India has been affected

Hope all the affected nations recover

Source: http://www.defence.pk/forums/centra...gainst-dollar-stocks-slump.html#ixzz2XK8aWDLC

 

[Tshering22]

This is what happens when you get ruled by an academician in the post of a supposed-to-be decisive dministrator with a remote control in the hands of a callous, spoilt, unconcerned foreigner.

Though I don't take the foreigner part seriously because we have parties like TMC, SP CPM etc who are equally bad.

When such lunatics rule the country, what can we expect?

 

[djsjs]

I just wanted to show that many economies and not just Indian have been affected by recent indication by US Federal Reserve that it could start to reduce stimulus measures for the US economy.

This is just for the India bashers and to show reality to many Indian members too, who think only India has been affected

Hope all the affected nations recover

Source: http://www.defence.pk/forums/centra...gainst-dollar-stocks-slump.html#ixzz2XK8aWDLC

but u forgot one thing,no matter how bad China's economy now,Chinese live in a much better condition than Indians.you can see that although Japanese economy lost for more than 20 years,we Chinese don't look down upon their economy,for we all know that they are much developed than us.here a question,do you or other indians know that China is much more developed than your country?

 

[datalibdaz]

Indian Rupee @ 60.70...What happened...Indian rupee was performing well months ago...

 

[asad71]

Should BD and Pakistan be able to regulate the open border trade (ie, smuggling) to their favor I/Rs will slide lower that B/Tk and P/Rs. Like pre-1965 War and again, pre-1971 War.

 

[Dash]

After all the boasting about surpassing China, the rupee has completely collapsed. India is on a death spiral and soon the government will seize gold from Indian households and Hindu temples to back the currency.

We are doomed man

 

[shuttler]

@60.715



Rupee hits all-time low, ends below 60 versus dollar

Rupee hits all-time low, ends below 60 versus dollar | Reuters

(Reuters) - The rupee breached formidable resistance of 60 to the dollar to slump to a record low on Wednesday, reinforcing the vulnerability of a country with limited reserves and struggling to narrow a record-high current account deficit.

The rupee's fall in the afternoon session was swift despite a feeble attempt by the RBI to defend the currency as end-of-month dollar demand from importers triggered stop-losses at around 60 the dollar that accelerated rupee falls.

The faltering currency hit bonds and stocks as foreign investors, worried about an early end to U.S. stimulus and looking to see their returns eroded, have sold a combined net of more than $6 billion in both markets so far this month.

The problems are being compounded by perceptions India is ill suited to defend the currency in the near-term. The Reserve Bank of India has around $291 billion in currency reserves, enough for only seven months of import cover.

The government has promised measures to attract foreign investment, but remains hampered by a perception that previously announced measures such as opening up the retail sector have faltered in their implementation.

"The advertised reason is the CAD, but this has been purely an excuse by markets," said Suresh Kumar Ramanathan, head of regional interest rate and FX strategy at CIMB Investment Bank in Kuala Lumpur.

"The real fact is that the market has attempted to take on the RBI by adding the pressure to intervene and to identify how much resolve the RBI has to defend the 60 level," he added, noting the rupee slumped once the central bank was unable to defend it.

The partially convertible rupee fell to an all-time low of 60.76, breaching the previous low of 59.9850 hit on June 20. It closed trading at 60.7150/7250 versus its Tuesday close of 59.66/67.

The rupee fell 1.8 percent for the day, the worst performance of the day among emerging Asian currencies and has slumped 11.3 percent since the start of May.

India is due to post current account deficit data for the first three months of the year on Friday, and any data that shows that gap has not narrowed from a record high of 6.7 percent of gross domestic product in the October-December quarter could spark more selling in domestic markets.

For now, a cautious RBI is likely to remain the first line of defence. The RBI was seen intervening on more than one occasion on Wednesday to stem the fall, selling dollars via state-run banks, but failed to prevent a slump.

The central bank has also been asking banks about the nature of flows and intraday open positions, which is being eyed by traders as a potential precursor for rules mandating a cut in speculative trades.

The RBI did that in December 2011 when it mandated lenders to reduce their intraday net open positions by 50-75 percent.

"The RBI now needs to come out with administrative strictures to cut speculation, curb excessive import/foreign currency loan hedges and take oil imports out of the market," said Moses Harding, head of asset liability management at IndusInd Bank in Mumbai.

The government is also due to announce measures such as opening up the telecom and defence sectors for foreign investment, adopting the same playbook in September when the country sparked a rally in markets by opening up the retail and aviation sectors to foreign investment.

By contrast, promises to adopt measures have so far failed to encourage investors.

Bond yields jumped on Wednesday, with the 10-year bond yield rising 8 basis points to 7.58 percent, its highest since May 14.

India's fixed income association relaxed trading bands for government bonds for Wednesday's session after some of the debt hit their upper yield circuits, dealers said.

Interest rate swaps also surged with the benchmark five-year OIS rate 14 bps up at 7.44 percent, while the one-year rate closed 10 bps higher at 7.53 percent.

The BSE Sensex ended down 0.3 percent.

 

[shuttler]

And now is closing to the end of June which is a long way to the end of September

RBI should still have some tricks up their sleeves why they are not using them baffles me!

 

[Mitro]

Is it Good time to Buy Gold ?
Any advice