This year the Indian rupee has been the worst performer in Asia and on a global scale it is the 3rd worst performing Currency trailing behind the Turkish Lira and the Kenyan Schilling.
With the macro economic figures coming out of the Govt. not showing any signs of improvement, and the Govt. in no mood to curtail it's ballooning social sector spend, the signs are not looking good for the Indian economy.
With about US$ 380 billion in reserves, the import bill is around US $ 35 per month. This ratio as pointed by the economists is about par with 1991 when we had to mortgage our Gold reserves.
Also with RBI Dy. Governer Gokharan, speaking to the media admitted that RBI could not do much to prop up the Rupee also has sent a negative signal in the market and has put the Rupee under pressure.
You have no idea how mighty fvcking pissed I am right now and have been for the last couple of months.y margins have vanished. I ain't got no clue what's going to happen next. My customers are not ready to buy at increased costs and I have material waiting on port that I have to release. I am so fvcking screwed by the fvcking dollar.
PS:- language used is intentional and shows how frustrated I am.
Yusuf I deal with Japanese components, till last year the Ex Rate was 100 Yen to 48 INR, In Sept it was 100 JPY to 52 INR and today it is 100: 70.
I am trying to just cling on and see where it goes from here.
I am also worried about whether the Govt. will put a brake on many of Defense procurement as they do not have the money and all the money is required for the NREGA and the FOOD Bill.
I don't know why RBI didn't step in and let the rupee fall beyond 48 let alone cross 50 and touch 52.50. I have no clue what RBIs policy is with regards to the rupee. Expect another piece hike in oil and also many of the day to day items will go up too like FMCGs.
Govt can play with that. Forex reserves are there and in far greater multiples than the biggest of all 10billon deal. Anyways they don't have to pay today or tomorrow for it.
Elections..elections..elections.. everyone is expecting a mid term in 2012 so they are pork barreling
I will try to find a very interesting article on why the RBI cannot intervene in the Forex market. Apparently looking at the Forex reserves our Imports, the trade imbalance, the conclusion was that we simply did not have the money to fight the battle in the Forex market.
This Congress regime is worst government i have ever seen.
High Inflation,$ value, Interest rate, level of corruption,level of incompetence, budget deficit. This government should go and fresh election should come. Any government would be better than present one.
The "regime" can't do shit about this matter. It's RBIs prerogative.
isn't RBI under indirect control of the government? Can anyone elaborate the reason behind this free fall of rupees. is it due to outflow of foreign currency from Indian market?
Who controls the RBI ?? It's all government policy on economical front initiated by PM,FM and Planning commission which is moved forward by RBI. RBI can't do anything until government trade/budget deficit and policy is in right direction.
RBI raised reverse repo, CRR, repo rate around 12-14 times in last 18 months to control Inflation. Still, Inflation is around 10%. Then why the hell RBI raised so much of rate ?? Indeed it is damaging high input cost, PAT for 1,000 of companies across the board which is effecting our economy and IIP no.. Going forward, it doesn't look like Inflation will come thanks to INR deprecation.
Rupee plunge may blunt India’s inflation fight
Last edited by Galaxy; 22-11-11 at 06:15 PM.
The government cannot do anything about outflow. Investors have moved away from countries like India due to turbulence elsewhere and guess what? They have taken refuge in US treasury bonds!!
RBI can sell dollars to keep the price in check.
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