Sachin=GOD Posted December 13, 2011 Posted December 13, 2011 RBI needs to shore up the rupee. No. The rupee's value will increase eventually on its own - right now the monetary situation in India is not so desperate as to demand an RBI intervention. The RBI needs to concentrate only on trying to reduce inflation.
CSK Fan Posted December 13, 2011 Posted December 13, 2011 Why ? Because the country can go into recession
Sehwag1830 Posted December 13, 2011 Posted December 13, 2011 Because the country can go into recession Do you know India's trade deficit is about 150 billion $ , which is 7.5 % of GDP. This is crazy .
ganeshran Posted December 13, 2011 Posted December 13, 2011 No. The rupee's value will increase eventually on its own - right now the monetary situation in India is not so desperate as to demand an RBI intervention. The RBI needs to concentrate only on trying to reduce inflation. How will it increase on its own? We are doing no favors by limiting FDI in retail and driving away investors. RBI has a tightrope to walk in terms of increasing interest rates to limit inflation but not so much as to squeeze out liquidity and hurting growth. the only short term solution is to not let the rupee drop below 50 using our forex.
ravishingravi Posted December 13, 2011 Posted December 13, 2011 How will it increase on its own? We are doing no favors by limiting FDI in retail and driving away investors. RBI has a tightrope to walk in terms of increasing interest rates to limit inflation but not so much as to squeeze out liquidity and hurting growth. the only short term solution is to not let the rupee drop below 50 using our forex. But that is a miniscule reason for this exchange rate decrease. Fact remains India's economic outlook looks bearish for the short term atleast. A simple FDI will not solve the problem. It certainly wouldn't increase the shocker IIP figures that just released. Times will be tough.
surajmal Posted December 13, 2011 Posted December 13, 2011 watch NDTV's truth vs. hype segment regarding FDI. Proves that FDI isn't the godsend that is made out to be. Without proper infrastructure in place, no one wants to invest in this country. Plain and simple. Congress has been budgeting for its corrupt social schemes in place of sustained infra development for last 8 years. Vote bank politics doesn't = development.
1983-2011 Posted December 13, 2011 Posted December 13, 2011 watch NDTV's truth vs. hype segment regarding FDI. Proves that FDI isn't the godsend that is made out to be. Without proper infrastructure in place, no one wants to invest in this country. Plain and simple. Congress has been budgeting for its corrupt social schemes in place of sustained infra development for last 8 years. Vote bank politics doesn't = development. what's a vote bank politics?
bulbul Posted December 13, 2011 Posted December 13, 2011 what's a vote bank politics? :omg: you mentioned 14% in one of threads just now without giving any specifics and ask here :giggle:
Sachin=GOD Posted December 13, 2011 Posted December 13, 2011 How will it increase on its own? We are doing no favors by limiting FDI in retail and driving away investors. RBI has a tightrope to walk in terms of increasing interest rates to limit inflation but not so much as to squeeze out liquidity and hurting growth. the only short term solution is to not let the rupee drop below 50 using our forex. It takes many years for the actual impact of things like FDI to effect the economy in a major way so even if FDI was introduced right now, the effect (whether positive or negative) would have been minuscule. RBI's measures to control inflation have already hurt the growth rate to some extent but right now inflation is the RBI's biggest concern and it may have to stifle growth even more (in the form of another increase in Repo rates) if Inflation does not come down soon (the latest inflation figures will be out tomorrow - lets see what happens). Short term solutions are not the way to go in the current situation where on one hand the Govt is in a policy paralysis and on the other hand Europe is in a mess - both of these are affecting the economy adversely so it has to take a long term view.
1983-2011 Posted December 13, 2011 Posted December 13, 2011 increase the interest rates so it will decrease inflation and also increase the value of indian rupees but this will decrease exports and increase imports
Sachin=GOD Posted December 13, 2011 Posted December 13, 2011 Worst probably over for battered Rupee BANGALORE: The battered Indian rupee, which hit a record low against the U.S. dollar on Tuesday, has probably touched bottom and will rise modestly by the end of next year, a Reuters poll showed. There is a growing expectation that Asian central banks -- including the Reserve Bank of India -- will ease policy in the first half of 2012, stimulating growth in the second half and drawing nervous investors back. That of course is dependent upon a solution to the euro zone crisis which has financial markets in its clutches and has triggered outflows from riskier developing markets, helping to underpin the U.S. currency. The Reuters poll of 23 strategists and analysts taken Dec. 8-13 found the rupee, which is just a hair off its record low of 53.35 per dollar struck on Tuesday, to trade above 51 in three months, strengthening to 49 around this time next year. "We expect the global scenario to improve slightly," said Bhupesh Bameta at Quant Capital. "India still has growth differential with respect to Western countries so we expect to see more capital inflows." Forecasts in the poll were in a wide range, outlining the uncertainty around the outlook for the rupee, which has plunged 18 percent against the dollar since the start of the year, making it Asia's worst-performing currency. Forecasts ranged from a low of 53 per dollar in a month to a rapid strengthening to 48. The range was not very different on the 12-month horizon, from 54.50 to 45 per dollar. The economy grew 6.9 percent, its slowest pace in more than two years, in the quarter ending September thanks to stubbornly high inflation and 13 interest rate rises since early 2010. Industrial output figures on Monday showed a shock 5.1 percent decline on a year ago, far worse than even the most pessimistic forecast in Reuters polls. The government slashed its growth forecasts last week, with officials warning India was facing a serious balance of trade problem and will have a tough time meeting its fiscal deficit target. But with inflation likely to cool, the Reserve Bank of India is expected to cut rates by the middle of next year, as well as the cash reserve ratio. Any expected rebound brought about by monetary easing could bring foreign investors back to India after a 20 percent fall in the benchmark stock index this year. Stock market analysts polled by Reuters earlier this month expect the 30-share BSE index to rally 20 percent in 2012. In the meantime, a lack of notable economic reforms, which has led to a perception of policy paralysis, has also taken some of the allure out of India for foreign investors. The government last week suspended plans to open its $450 billion supermarket sector to foreign firms, backtracking from one of its boldest reforms in years in the face of a huge political backlash. That policy U-turn and the backlash that followed might make it more difficult for the government to pass other reforms, like allowing investors easier access to Indian markets. "The rupee still needs to attract large capital inflows to bridge the deficit, or fall further," said Ramya Suryanarayanan, economist at DBS Bank in Singapore. "This, it would seem, ties the fate of the rupee to the pace of growth-enhancing structural reform ahead." Economic Times And on the other hand: India inches closer to crisis as rupee retreats MUMBAI: India may face its worst financial crisis in decades if it fails to stem a slide in the rupee, leaving the Reserve Bank of India (RBI) with a difficult choice over how to make best use of its limited reserves to maintain the confidence of foreign investors. If the RBI is too timid, it risks adding fuel to the ire of portfolio investors, which India relies on heavily to cover its imports tab. Aggressive intervention would leave the central bank open to criticism that it is wasting precious money on problems that are beyond India's control anyhow, noteably Europe's debt crisis. Unlike most of its Asian peers, India has recently been running large current account and fiscal deficits. That means it must attract sufficient foreign money -- namely U.S. dollars -- to close the gap, and a weaker home currency makes that costlier. This is a perennial problem for India. The current situation is so worrisome because India is grappling with big internal and external economic threats simultaneously. Growth is slowing. Inflation remains high. Political paralysis has stymied domestic reforms. The RBI, the last line of defence against a currency meltdown, has cautiously begun to support the rupee, but its firepower may be more limited than its $300 billion in reserves would suggest. Beyond India's borders, Europe is the biggest worry. As its banks deleverage, investment money has flooded out of India's markets. If Europe's debt troubles deteriorate, India could be hit with a balance of payments crisis as severe as the one that forced a sharp devaluation in 1991. The rupee, which has dropped 16 percent in the past four months, got a reprieve last week after the world's big six central banks banded together to try to ease dollar funding strains, helping it to snap a four-week losing trend. But analysts widely expect the rupee, trading on Monday at 51.26 per dollar, to resume its slide. "The Indian currency will be the first casualty of a deterioration in the euro zone crisis," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai. If Europe's crisis deepens, India's trade deficit would widen even more rapidly, and it would have even more trouble attracting foreign capital. "Risk appetite will obviously collapse and gradually the currency crisis is likely to take the shape of a balance of payments crisis," Nitsure said. Worries about India have spiked in tandem with concern over Europe. UBS hosted a client conference call about India on November 29, which it announced with an email headlined "India explodes." Deutsche Bank sent out a report on November 24 entitled, "India's time of reckoning." "Suddenly everything seems to be coming to a head in India," UBS wrote. "Growth is disappearing, the rupee is in disarray, and inflation is stuck at near-record levels. Investor sentiment has gone from cautious to outright scared." India's current account deficit swelled to $14.1 billion in its fiscal first quarter, nearly triple the previous quarter's tally. The full-year gap is expected to be around $54 billion. Its fiscal deficit hit $58.7 billion in the April-to-October period. The government in February projected a deficit equal to 4.6 percent of gross domestic product for the fiscal year ending in March 2012, although the finance minister said on Friday that it would be difficult to hit that target. India relies heavily on portfolio inflows -- foreign purchases of shares and bonds -- as a means of covering its current account gap. Those flows are fickle. Foreign portfolio investors have sold a net $50 million worth of equities so far in 2011 , in sharp contrast to the $29 billion they invested in 2010, data from the Securities and Exchange Board of India's website showed. In November alone, foreign funds pulled $661 million out of Indian stocks. "The Indian economy is one of the most vulnerable to liquidity shocks in the region, not helped the least by deficits in its key balances," said Radhika Rao, an economist with Forecast PTE in Singapore. WHERE IS THE RBI? The drop in portfolio inflows and the hefty current account and fiscal deficits have been a key factor behind the rupee's decline. The RBI appears to have intervened in mid-November to try to slow the decline. Between October 28 and November 25, reserves dropped by $16 billion to $304 billion, yet the currency still fell by 7 percent over that period. Trading in rupee offshore forward contracts show traders are betting on the rupee declining a further 1.7 percent over the next three months, and 4.5 percent in a year. Many economists argue the RBI has been too timid, and deserves part of the blame for the rupee's weakness. A deputy governor said on Saturday that the central bank would use "all available instruments" to stem a downward spiral. Other officials have insisted the RBI should avoid "undue" intervention, especially when the currency depreciation is caused by external forces, a message economist Rajeev Malik says could backfire. "The biggest mistake RBI has made is that it has almost given an open invitation to speculators to short the rupee," said Malik, who is with CLSA in Singapore. "It is really bizarre for any central bank to openly keep on saying that it will not intervene when there is already pressure on the currency to weaken and globally things are so uncertain." Contrast that with Indonesia, which burned through 8 percent of its foreign exchange reserves in a single month in September to defend the rupiah from a global bout of market volatility. Economic Times
yoda Posted December 13, 2011 Posted December 13, 2011 US economy is going down, rest of the world is going down faster. :hahaha:
mishra Posted December 14, 2011 Posted December 14, 2011 :WTF: Just reciecived a refund cheque and a letter from HM revenue and Customs because they had deducted too much tax for year 2006-2007. :D HM revenuez :fail: :protest:
ViruRulez Posted December 14, 2011 Posted December 14, 2011 As a webmaster, not a bad thing to happen. It is more worrying when the dollar value got down to like 39 rupees and the same amount gave far lesser returns for Indian webmasters. But hope that the economy stabilizes a bit. I do not want 39 rupees either. A midway in the mid to late forties is an ideal state for Indian webmasters. For the nation, development and growth would again become fast once the b!tching between political parties and perennial corruption ends.
mishra Posted December 14, 2011 Posted December 14, 2011 Actually, Both Dollar and Pound is artificially inflated in value to get the best deal from ECB in the event of euro collapse.... So if you want to invest in India using $$, Invest it just before Euro collapse or before Euro NOT collapse It is soo funny.... US/UK Bankers are now banking on Euro collapse.... Two years back they were banking on Euro is going to survive. Four years back they were banking on mortgages. Do hell with growth and export competitiveness....:asleep:
Holysmoke Posted December 15, 2011 Posted December 15, 2011 The dollar is high. Flamy, what have you done :nervous:
bangladeshifan Posted May 25, 2012 Posted May 25, 2012 dollar is not high. its falling against pound. rupee is falling faster
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