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

[senkakudefender]

China may not overtake America this century after all - Telegraph

The world's tallest tower should have been built by now. Officials said last year that the great edifice with 220 floors would be erected in three months flat in China's inland city of Changsha by March, snatching the crown from Dubai's Burj Khalifa.
The deadline has come and gone, yet the wasteland sits untouched. It now looks as if the fin d'époque project – using prefab blocs – may never be approved. Even China knows its limits.
Prime minister Li Keqiang has asked the State Council to clamp down on the excesses of the regions. Not before time. A top regulator says local government finances are "out of control".
Mr Li aims to cut China's economic growth to a safe speed limit of 7pc next year and rein in rampant investment – still a world record 49pc of GDP – before it traps the country in a boom-bust dynamic of frightening scale.
Vested interests are conspiring to stop him, launching a counter-attack from their power-base in the $6 trillion state industries. Even so, uber-growth is surely over.

China's catch-up spurt has a few more years to run in the Western hinterlands perhaps, but when the full story comes out we may find that nationwide growth has already fallen below 7pc.
Mr Li complained in a US diplomatic cable released on WikiLeaks that Chinese GDP statistics are "man-made", confiding to a US diplomat that he tracked electricity use, rail cargo, and bank loans to gauge growth. For a while, analysts use electricity data as a proxy for GDP but the commissars kept a step ahead by ordering power utilities to fiddle the figures.
The National Bureau of Statistics has since revealed that data collected by the regions overstates GDP by 10pc, though they have not acted on the insight. It is well-known why this goes on. The reward system of the Communist hierarchy has been geared to talking up growth, and officials gain kudos by lowering the stated "energy intensity" of their zone.
China's Development Research Council (DRC) expects growth to drop to 6pc by 2020. It could be much lower. The US Conference Board says it will average 3.7pc from 2019-2025 as the ageing crisis hits. Michael Pettis from Beijing University thinks it is likely to slow to 3pc to 4pc over the next decade, deeming this entirely desirable if it comes from taming the runaway state enterprises.

Now estimates are 5% for 2020. This liquidity crisis shows facts are scarily true. China would be well advised to rant less do more. India 10 yrs ago was nowhere in the global scene. Today Asia brings to mind China and India. Rs 60 -> $ it was expected since 2010. My aunt in US warned me bout this. Today all money from emerging markets is heading to USA on fed stimulus cut. India's gold orgy and petro imports brought about this Rs deprecation. China - India who thought they survived 2008 are in for a very hard time.

 

[Azazel]

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.

LOL,Just shows how ignorant you are.India currently has huge trade surplus against both of these countries.If anything it will be a big bonus for us.

Is it Good time to Buy Gold ?
Any advice

Stop buying the Fuking Gold.Its the root of all the problem.Rupee is falling because of the huge trade deficit that is caused by huge Gold imports.Invest some where else like real estate.

 

[sputnik]

पाकिस्तानी रुपये को भारतीय रुपये का जवाब...गिरते हैं शहसवार ही मैदान-ए-जंग में वो तिफ़्ल क्या गिरेगा जो घुटनों के बल चले

 

[wolfpack]

LOL,Just shows how ignorant you are.India currently has huge trade surplus against both of these countries.If anything it will be a big bonus for us.



Stop buying the Fuking Gold.Its the root of all the problem.Rupee is falling because of the huge trade deficit that is caused by huge Gold imports.Invest some where else like real estate.

Gold is always permanent it can wane and wax but it will plateau sometime unless you have some ALCHEMISTS Miracle of TRANSUMATION!
Indians invest in risk free and fixed investments that is taught to them and in their blood, so they buy gold whenever they can.

 

[Azazel]

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!

No more tricks,RBI won't sell its precious Dollar reserves to stabilize Rupee.In reality the fall of rupee is not the disease its the cure of the disease that is high inflation which has pushed up the cost of Indian products in global markets leading to a massive trade deficit.The rupee needs to fall if India is to maintain its global competitiveness.I will say let it fall all the way down to 65.

 

[IndoUS]

The cause is pretty obvious. The current pull back by the US Federal Reserve means that dollar would be tight in the coming future. So companies are buying dollar as much as they can. Secondly the huge Gold import has to be curved, reduce or stop import of Gold or put limit on the sale of gold, to rein in the current deficit. Thirdly the Chinese banks have reduced the money they lent out to people. When the two largest economies are pulling back and tightening the cash flow this is bound to happen.

Gold is always permanent it can wane and wax but it will plateau sometime unless you have some ALCHEMISTS Miracle of TRANSUMATION!
Indians invest in risk free and fixed investments that is taught to them and in their blood, so they buy gold whenever they can.

Gold also creates huge devaluation of the currency because of the deficit. What is good for some is not good for all.

 

[Azazel]

Gold is always permanent it can wane and wax but it will plateau sometime unless you have some ALCHEMISTS Miracle of TRANSUMATION!
Indians invest in risk free and fixed investments that is taught to them and in their blood, so they buy gold whenever they can.

What they don't understand is,When we buy gold you are paying it in dollars.We don't produce any Gold.We are collectively buying around 30% of total world production every year.Now who is gonna pay for this.

 

[shuttler]

No more tricks,RBI won't sell its precious Dollar reserves to stabilize Rupee.In reality the fall of rupee is not the disease its the cure of the disease that is high inflation which has pushed up the cost of Indian products in global markets leading to a massive trade deficit.The rupee needs to fall if India is to maintain its global competitiveness.I will say let it fall all the way down to 65.

You are probably not aware of the tricks up the sleeves dude!
Falling rupee is disastrous for an import dependent economy
The gold buying spree for the year has just started for india. Think about it!
And the monsoons!

 

[Azazel]

You are probably not aware of the tricks up the sleeves dude!

By Tricks you mean Selling dollars that too at a time like this is nothing but suicidal.

Falling rupee is disastrous for an import dependent economy

Not as much as high inflation.Let it go down.We still have good capital inflows even during Feds tapering its QE package.We can still Finance the CAD.

The gold buying spree for the year has just started for india. Think about it!

Actually Gold buying has comedown thanks to slowing Inflation ,By September it will go below 4%.That will ease the Gold buying.People buy Gold as a hedge against inflation.

And the monsoons!

Good Monsoon Good news for economy.

 

[shuttler]

By Tricks you mean Selling dollars that too at a time like this is nothing but suicidal

you need dollars not selling it

Not as much as high inflation.Let it go down.We still have good capital inflows even during Feds tapering its QE package.We can still Finance the CAD.

what is your consumers cpi? 8%? inflation is your enemy
if no proactive announcement by RBI your decrease in FX reserve is a worry
Your inflow helps cashflow but not for long

Actually Gold buying has comedown thanks to slowing Inflation ,By September it will go below 4%.That will ease the Gold buying.People buy Gold as a hedge against inflation.

Let see how it goes down the stretch and gold is an elastic commodity in india
It hasnt reached the time for peaking yet

Good Monsoon Good news for economy.

That is the good side of it
A coin has 2 sides
Monsoon is something you cant control

 

[Azazel]

you need dollars not selling it

That's the same thing I am saying Genius.

what is your consumers cpi? 8%? inflation is your enemy[/QUOTE]

CPI Inflation was 9.31% in May and headline WPI inflation was 4.7%.But since there is good monsoon Food inflation will come down to 8% by sept octobar.

if no proactive announcement by RBI your decrease in FX reserve is a worry

Yeah Yeah,Some might say your Frankenstein Banking system is a bigger worry.Last week RBI data shows an increase of 900 million Dollar.It goes up and down from time to time.We have plenty of expats who sends a lot of money here.

Forex Reserves increased by USD 982.3 million to 290.658 billion

Your inflow helps cashflow but not for long

Blah Blah,You have some crystal ball I don't know about.

Let see how it goes down the stretch and gold is an elastic commodity in india
It hasnt reached the time for peaking yet

Gold imports

That is the good side of it
A coin has 2 sides
Monsoon is something you cant control

You are boring me,Tell me something I don't know.

 

[shuttler]

That's the same thing I am saying Genius.

I am saying there is no need to repeat the points that I ve stated Einstein

CPI Inflation was 9.31% in May and headline WPI inflation was 4.7%.But since there is good monsoon Food inflation will come down to 8% by sept octobar.

CPI Inflation was 9.31%

- funny terms but it is very high even @8%

Yeah Yeah,Some might say your Frankenstein Banking system is a bigger worry.Last week RBI data shows an increase of 900 million Dollar.It goes up and down from time to time.

Let the mourners worry about our economy
We have plenty of ammunitions to fight off the nay sayers
Still your fx reserve $290.658 billion can only last for 6~7 months of import payments even though RBI has not used much of the reserve to counter the dive of the rupees

We have plenty of expats who sends a lot of money here.

That is the brighter part
They provide liquidity but the foreign money belongs to your citizens not to the indian government

Blah Blah,You have some crystal ball I don't know about.

I think so!

Gold imports

as usual

You are boring me,Tell me something I don't know.

a lot it seems!

Boring?

End of discussion!

 

[Azazel]

I am saying there is no need to repeat the points that I ve stated Einstein

Only problem is you didn't stated anything.

- funny terms but it is very high even @8%

For a country like India,Food inflation at 8% is still very moderate.Our rural income is rising quite fast.People are consuming more.Supply has not been able to keep up with the rising demand.that's why such high inflation is normal.Plus there are supply side issues.

Let the mourners worry about our economy
We have plenty of ammunitions to fight off the nay sayers
Still your fx reserve $290.658 billion can only last for 6~7 months of import payments even though RBI has not used much of the reserve to counter the dive of the rupees

That's why they didn't counter the drop of the rupee.Are you dumb or what?

That is the brighter part
They provide liquidity but the foreign money belongs to your citizens not to the indian government

You don't seem to know much on this topic.That dollar will stay in the system.

 

[RangerPK]

Maybe the Internet at Indian call centers isn't working well?

 

[Bobby]

It is all due to widen trade deficit...and biggest part is too much import of gold.....so Indian people stop buying gold......