Indian Rupee depreciation against Dollar

[Pintu]

Business Line : Industry & Economy / Banking : RBI watching situation closely: Subbarao

Business Line : Industry & Economy / Banking : Pressure mounts on rupee

India urged to keep rupee stable - FT.com

 

[Pintu]

Weak rupee: Boon for some; bane for many

Weak rupee: Boon for some; bane for many
Annapurna Singh, New Delhi, Nov 22, DHNS:

The rupee's losing streak continued on Tuesday, as it breached historic 52.73 to the dollar, fanning fears of high inflation and rise in oil subsidy bills.

It is grim outlook for the nation as a whole. But, at the individual level, the rupee depreciation has come as the boon for some and bane for others.

First the good news. Dollars sent by Indian expatriates, for example, will make windfall gains compared to what they earned six months ago. "Each dollar is earning 5 to 7 rupees more," said Delhi-based Prashant Ahuja, whose elder siblings are in New York and send back money for their old parents. "It is time to cash in," he said. Those who own stocks or mutual fund units outside India also have reasons to cheer as they will earn more in rupee.

There are many mutual funds in India, which operate on global level including Birla Sun Life, DWS Global Thematic Offshore Fund, Sundaram Global Advantage and Kotak Global. An official of Kotak Global said, "great time to stay invested abroad, but sooner the rupee rebounds, the losses will be as bad."

Software exporters gain
Indian companies selling their services abroad too stand to benefit with each appreciating dollar or any other currency which is on the rising spree against the Indian rupee. IT major Infosys and Tata Consultancy are among some of the companies, which sell their services abroad.

But fall in rupee is likely to affect a vast majority on Indians in the form of higher oil prices. Since India depends on imports for 80 per cent of petroleum products requirements, rise in oil import bill will be passed on to the consumers. In fact, oil companies cited depreciation of rupee as the main reason for the petrol price three weeks ago.

If rupee continues to fall, the government could be forced to raise prices of diesel, kerosene and LPG, adding to the overall inflation further.

Those planning to buy consumer durables such as cars, television sets, computers, mobile phones and the like should also finish shopping fast as imports of raw materials for these articles are expected to cost more with every rise in dollar as appreciation of the currency putting severe pressure on companies which import substantial amount of components from overseas.

There are already hints that car prices would be raised. While the domestic tourism industry can celebrate the appreciation in dollar as this would increase tourist flow to Indian destinations, the outbound tourism might take a hit.

Although travel agencies have yet not complained on any loss of profit in the wake of rupee slide, there is no guarantee that their booking counters will be as crowded in the future, if the home currency continues to weaken further.

 

[nrj]

Its bane specially for industrywalas because they import much more than they export. Weak rupee will reduce their margins but again who in global market is having money to pay high for their goods? China is leading the pack because of low cost products & cheap manufacturing hubs.

 

[Bangalorean]

^^ What about oil though? I can see Rs. 100 per liter not too far into the future.

And forget petrol - think of diesel, kerosene, etc. - inflation will screw us over.

Every consumer item will become more expensive.

Fine to say that we should export more - but these reforms, systemic changes, etc. - they don't happen overnight. We have had just 20 years so far, with lots of constraints. Everything should happen gradually and in its time.

Such collapses will kill us. Nothing to be happy about. Waiting for it to come back to 47-48.

 

[nrj]

I believe rupee will stabilize in 4-5 months.

Rising consumer costs have more to do with inflation. Energy resources should be deregulated. If the petrol/diesel prices are going to increase, they should increase. I will go further to demand rollback of subsidies on LPG & other items.

Euro sovereign crisis has screwed everyone. We will be facing our time. Having said that, if GOI does not clear the air about their plans by Feb end then be ready for another inflation hike. We don't know where we are sailing then.

 

[Bangalorean]

^^ I agree with your views on deregulation, subsidy rollback, etc. etc. - but all in the long term. Absolutely nothing can be (and should not be done) in a few weeks, or even months.

 

[LurkerBaba]

^^ I agree with your views on deregulation, subsidy rollback, etc. etc. - but all in the long term. Absolutely nothing can be (and should not be done) in a few weeks, or even months.

"Subsidy rollback"

x-posting..

Pranab approves changes in Food Bill

The changes to be made in the proposed Food Bill were discussed with Congress President and UPA Chairperson Sonia Gandhi, he added.

The proposed Bill would cost the government exchequer more than Rs 1,00,000 crore annually in subsidies. Presently, the subsidy bill on food is less than Rs 70,000 crore.

 

[sob]

Top 50 companies in India have lost Rs 5300 crores in this financial year due to Forex loss.

 

[SpArK]

Action to stem Re fall likely from Wednesday: Govt sources - CNBC-TV18 -

 

[sob]

Yusuf this was what I was trying to find out regarding our Forex Reserves and the fall in Rupee.

The one thing that has changed about India's currency macro is that its net reserve coverage buffer as a share of GDP (defined as foreign exchange reserves plus the annual current account balance less the short-term external debt outstanding) is today around 9.1 percent of GDP, a fall from 14 percent in 2008. With most other emerging economies, that buffer coverage actually increased since 2008. This puts the rupee squarely in the category of "risk currencies", which is why in the heightened risk aversion over the eurozone economies, the rupee has fallen sharply harder.

 

[Yusuf]

Sob, the free fall in the currency will only exasperate the situation. Weaker currency will mean the external debt will only rise and so will the other import bills esp oil. There has to be a regulation of te currency when it's under a free fall. A 20% eexpreciation in currency within a short span of 2 months is unacceptable.

 

[Yusuf]

Reserve Bank of India (RBI) took a series of measures to improve the dollar supply as the rupee continued to weaken as concerns over a crisis in Europe deepened.

RBI steps in to boost $ inflow - The Times of India

 

[sob]

Warning: Currency turmoil could cost India Inc Rs 33,000 crore | Firstpost

Amid pains of a plunging rupee and tanking stock markets, here's some more bad news: foreign currency convertible bonds (FCCBs) could soon trigger huge capital outflows among companies, further weakening sentiment among investors.

According to a report by Edelweiss, India Inc could lose as much as Rs 33,000 crore in such redemption.

The brokerage says there are 28 companies with FCCBs totalling Rs 24,500 crore that will mature in the next financial year. Among them, 25 will most likely face redemption, it adds.

 

[sob]

Rupee retreats from record low as traders cut long dollar positions | Firstpost

The rupee retreated further from record lows on Thursday as traders cut long dollar positions following the Reserve Bank of India's measures to ease rules on deposits by non-resident Indians and those on overseas borrowing rules for firms.
The RBI on Wednesday raised the interest rate ceiling on deposits held by overseas Indians in both the rupee and foreign currencies, citing market conditions.

RBI seems to betting on inflows from NRIs to shore up the INR, but then this is hot money and with the recent track record of the Rupee not many would be enthused by this step.

 

[sob]

The biggest silver lining what I can see is the drop in crude prices internationally. This will go a long way to help reduce our import bill.

 

[cir]

Don't panic。 It ins't over yet。 Not till the fat lady sings。

 

[maomao]

Don't panic。 It ins't over yet。 Not till the fat lady sings。

Don't worry we will be fine......Fat lady has already started singing in China and all Fat ladies are onto China for singing......enjoy the flight of capital and manufacturing contracts coupled with Ghost towns LOL

 

[nrj]

HSBC says Rupee can plumb to 58 against Dollar - The Economic Times

Told 'ya

"This will happen despite intervention by the RBI," he said without giving any specific timeframe.

 

[Pintu]

Business Line : Markets / Forex : Checking rupee fall: Govt, RBI cautious; keen to conserve forex reserves

 

[DMF]

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.

The Dollar is problem itself, the USA print more money few years ago, this extra amount of money is regarded as hot money, went to many countries to generate profit. Indian bank has a high saving interest, some dollar come to your banks to enjoy this interest. Also many dollar came to China, because RMB must be revalued and they make money, but China bank interest low, at 2.5%, so the hot money went into real estate, now the real estate price very high, it's time for the hot money to withdraw from China market with huge profits, but government put a lid on the real estate, no loans from bank, and many limitations to buy a house, now the prices are going down, still difficult to sell the apartments. The Chinese government revenue of this year is more than RMB10 trillion, but only RMB 7 trillion spent so far for this year, the central government just give a warning to their branches and locals that they should not squander the remaining RMB3.5 in the remaining month of the year.
You can see, the USA is the real trouble maker, they ask you to free the banking system and free your market, but they are better player, you are the loser. The USA hates China, because China prefers to play by its own way, the USA have many tricks, but China not fall in the trap.