Indian Rupee depreciation against Dollar

[Galaxy]

Interest rates are raised to control inflation. RBI follows laws passed by parliament and not govt dictat. RBI is like the SC.

It is raised depends on domestic economic policy. It's not that simple. How come high interest rate will decrease the international commodity price, transportation expenditure and monsoon related food products ?? Why Inflation is not down after 14 raises ?? Reason is it can't be controlled till certain extent. After June raise was unnecessary. BTW, high rate has damaged 8% profit margin for overall listed top 500 companies and 1% GDP.

RBI always follow Government. Parliament = Government.

 

[Yusuf]

Balancing interest rates has always been a fine art. Inflation is high because the economy is booming . There is no one reason for it. High food prices is a world wide thing and not an India specific issue.

 

[nrj]

Remit Remit Remit!

This may be small window in devaluation. Same thing happened in Q1 2009. Everybody celebrated over higher earnings & relaxed. They woke up only when Rupee again bounced back in less than 3 months.

Euro will increase your income by 16.5%, Pound by 17% ! And if you are receiving money from UAE then its party time!

 

[Galaxy]

Remittance to India is quite good. Currently in FY11-12 will be around 55-60 Bn $ which translates around little over 3% of GDP.

 

[thakur_ritesh]

i am surprised the RBI isnt intervening. are they looking at 53-54 levels? 08-09 they limited it to 51-52 and there was heavy intervention.

what is the game plan here?

 

[The Messiah]

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.

become exporter then instead of importing things.

 

[Yusuf]

become exporter then instead of importing things.

Give me an idea and also a product that competes with china.

 

[The Messiah]

Give me an idea and also a product that competes with china.

clothes...

 

[Yusuf]

clothes...

You know how many garment factories in Peenya Industrial area has shut down? There is no fun in it.

 

[nrj]

Forget China. Get into IT

--

Dollar has devalued itself by 20% in last 3yrs. Yuan continuing the same. Can we really afford to appreciate Rupee?

Allowing rupee to slide to 60 combined with Agricultural reforms & FDI in retail would be the best move now.

 

[Galaxy]

i am surprised the RBI isnt intervening. are they looking at 53-54 levels? 08-09 they limited it to 51-52 and there was heavy intervention.

what is the game plan here?

No game plan is the main problem. RBI has perform miserably in last 18 months. They are just following bookish concept without any dynamics. I still don't understand why we lost 1% GDP growth in FY11-12.

 

[Yusuf]

Rupee at 60 will be a disaster. Oil import bill will shoot up. Be ready to pay 100 a liter even without hike in oil prices. No to mention many other critical imports.

 

[nrj]

Overvalued rupee hurts Agriculture sector.

'90s reforms saw some 20% devaluation of rupee. We want to reverse those reforms? I don't know maybe that will happen. Cong is high on madness these days. Food Sec bill is first step they are bringing to nullify reforms.

Appreciating rupee helps industry, allows them to keep the costs low & increase profitability. Its been a old socialist trick.

 

[trackwhack]

All policy blunders of the RBI and GOI so far will pale in comparison with what Mr. Mukherjee will announce in budget 2013. Similar to last term they will forgive all farm loans and load the exchequer with another 1 lakh Crore of debt. Who can stop them? No one.

 

[Galaxy]

The inability of the GoI to go ahead with the disinvestment programme has also created a revenue gap that needs to be covered with greater market borrowings. This has had an impact on government bond yields which have gone up by nearly 0.5% since the announcement of additional borrowings last month. The woes for rupee are expected to continue until inflows start to resume from the corporate side. Data from U.S. is fine and not indicating any double dip. Even MENA and PIGS don't look in danger. Only fear is Germany reversing the decision to bail-out PIGS due to excepted high Inflation. If Government takes some positive steps for Investment and Industries, Gold price sees some correction Then value of Rs will rise in next few months.

If the current run rate remains same then the trade deficit can be controlled at 6% of GDP and the Current account deficit at 2.6%, Then due to attractive yield, 10 Bn USD can enter Indian market by March-April, 12 which might translate Rs value below 45.

Still there is Hope provided that Government takes some steps.

 

[Bangalorean]

There will be a freaking balance of payments crisis if the rupee goes down below 60. 1991 all over again. Will the powers that be have the guts to take bold reform steps once more? All very well to say that the best thing is to have reforms in retail, disinvestment, etc., but the question is, will that really be done?

 

[Galaxy]

There will be a freaking balance of payments crisis if the rupee goes down below 60. 1991 all over again. Will the powers that be have the guts to take bold reform steps once more? All very well to say that the best thing is to have reforms in retail, disinvestment, etc., but the question is, will that really be done?

It won't happen as situation is different.

Currency deprecation is not because of global market or internal/external debt crisis. It's because of government economic policy like delay in disinvestment, high interest rate and speculation in commodity/forex/equity market. Things will improve going forward when speculative money will come out after expected news and GoI will take few necessary step.

 

[nrj]

Just to make clear, overvaluing rupee will reverse reforms. Devaluation of rupee will protect them.

 

[Pintu]

Re plunges to all-time low, but rebounds to end at 52.29/30<?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-comfficeffice" /><o></o><o> </o> - www.ddinews.com

Re plunges to all-time low, but rebounds to end at 52.29/30

The Indian rupee on Tuesday hit its all-time low of 52.73 intra day against the US dollar on sustained demand for the US currency from banks and importers, mainly oil refiners, amid signs of further capital outflows.

Later in the day, the rupee managed to recover some lost ground amid speculations of Reserve Bank's intervention to arrest the slide. RBI's role in forex markets could not be ascertained.


It finally settled the day at 52.29/30, still down by 15 paise from its previous close.



Meanwhile, Finance Minister Pranab Mukherjee said RBI's intervention in the forex market will not arrest the slide as FIIs' pullout and global reasons were behind the depreciation.



"RBI intervention (in the forex market) will not help," he told reporters.
Reserve Bank Governor D Subbarao while attributing the sharp decline in rupee to external factors said the central bank has not yet decided on intervening in the forex market to arrest the slide in the local currency.


"Our policy is that if the macro-economic situation is impacted due to the exchange rate fluctuation or undue volatility we will have to intervene. We are yet to decide whether to intervene or not at the moment," Subbarao said.


In seven straight sessions, the rupee has lost a total 217 paise or 4.34 per cent.
At the Interbank Foreign Exchange (Forex) market, the local currency opened bearish at 52.36/37 immediately touched its life-time low of 52.73.


Dealers said persistent capital outflows aided the rupee downtrend as Foreign Institutional Investors (FIIs) pulled out USD 460.40 million in five days since 15th November.



A recovery in local equities and late dollar selling by exporters stemmed the rupee fall, dealers said.


Subbarao said in Hyderabad, "Our policy is that if the macro-economic situation is impacted due to the exchange rate fluctuation or undue volatility we will have to intervene. We are yet to decide whether to intervene or not at the moment."


Referring to movement of rupee in the medium-term, Narayan said, "Rupee has depreciated around 8 per cent in last one month and such larger drop is not good for the economy. So, the regulator is likely to come up some specific steps to ease pressure."


"Rupee should come back to Rs 50 level by March, 2012," he added.


The RBI fixed the reference rate for the US dollar at Rs 52.7015 and for the euro at Rs 71.0788.


The rupee continued its downward march against the pound sterling to settle at Rs 81.93/95 from Monday's close of Rs 81.59/61 and also dipped further to Rs 70.88/90 per euro from Rs 70.08/10 previously.


It, too, moved down further against the Japanese yen to Rs 68.02/04 per 100 yen from its last close of Rs 67.82/84.



(SP-22/11)

 

[Pintu]

Reserve Bank of India to issue Rs 100 notes with Rupee symbol - The Economic Times

22 Nov, 2011, 09.44PM IST, PTI
Reserve Bank of India to issue Rs 100 notes with Rupee symbol

MUMBAI: The Reserve Bank will shortly issue Rs 100 notes which will have the rupee symbol.

The Rs 100 notes will be of the Mahatma Gandhi-2005 Series bearing the signature of Reserve Bank of India (RBI) Governor D Subbarao and with the year of printing mentioned on the back of the banknote, the apex bank said in a statement.

The design of the notes to be issued is similar in all respects to the existing Rs 100 in Mahatma Gandhi Series-2005 issued earlier except for the rupee symbol.

However, all the Banknotes in the denomination of Rs 100 issued by the RBI in the past will continue to be legal tender.

Last week, the RBI had announced that it will soon introduce notes of Rs 1,000 and Rs 10 denomination featuring the rupee symbol.

The Indian rupee got an unique symbol -- a blend of the Devanagri 'Ra' and Roman 'R' -- last year joining currencies like the US dollar, euro, British pound and Japanese yen in having a distinct identity.

The new symbol, designed by Bombay IIT post-graduate D Udaya Kumar, was approved in July 2010.