Indian rupee hits new low despite central bank moves

[gslv mk3]

And with that India nominal GDP below $1.5 trillion. Per capita of what? $1200?

Still much higher than yours.

 

[karan.1970]

Why are they flip-flopping so much?

First they try to tighten liquidity, now they are injecting in more liquidity?

What the....

Welcome to the world of Indian politics..

 

[gslv mk3]

Its 63.22 now

 

[TopCat]

Its 63.22 now

Its temporary. RBI moved in desperately on Friday so that rupee remains strong over the weekend as there would be no trading. Will see on Monday

 

[gslv mk3]

Its temporary. RBI moved in desperately on Friday so that rupee remains strong over the weekend as there would be no trading. Will see on Monday

RBIs havent taken the neccesary measures as of yet,and we are seeing an upward movement for now.

 

[Vinod2070]

It is a passing thing.

The fundamentals of the economy remain strong and it will bounce back soon.

 

[Lightningbolt]

It is a passing thing.

The fundamentals of the economy remain strong and it will bounce back soon.

The Indian economy and the Rupee is collapsing exactly because the fundamentals of the Indian economy is absolutely dreadful. No country with strong fundamentals experience such a dramatic currency collapse.

Dream on Indian, clueless as ever

 

[Iggy]

Kindly refrain from applying your madarsa economics here...can you please elaborate how????

No he cant.. He is just looking for some free thanks..

 

[eastwatch]

1 USD = 76.8500 BDT

USD appreciated 12.16% over 6 years against Taka

and The historical graph is here: US Dollar: CURRENCY:USD quotes & news - Google Finance

It is BDT that has appreciated 12.16% against USD, not the opposite.

 

[eastwatch]

We know the Indian economy is collapsing with the Rupee in total free fall, the question now is will the Indian union break up?

India is finished imo.

No, it is not the end of India. I believe more and more foreigners-owned money is taking flight out of India. The reason may include profit taking and non-trusting of Indian economy, which is causing the fall of Rupee.

There must have some good reasons that the State Bank of India is not interfering in the market, not yet and not in huge scale. It shows a kind of confidence. Or, is it not?

 

[Skies]

It is BDT that has appreciated 12.16% against USD, not the opposite.

You sure?

In 2007, Aug 03, 1 USD = 68.51 BDT
In 2013, Aug 23, 1 USD = 76.85 BDT

(76.85-68.51)= 8.34 BDT

So now we have to pay 8.34 BDT more than before against 1 dollar. So the change is [(76.85-68.51)\68.51 * 100] = 12.17%.

So which one is appreciated? Taka or Dollar?

The depreciation of a country's currency refers to a decrease in the value of that country's currency. For instance, if the Canadian dollar depreciates relative to the euro, the exchange rate (the Canadian dollar price of euros) rises: it takes more Canadian dollars to purchase 1 euro (1 EUR=1.5 CAD → 1 EUR=1.7 CAD).

When the Canadian dollar depreciates relative to the euro, the Canadian dollar becomes more competitive because the price of Canadian goods when exchanged to euro will be cheaper leading to a larger Canadian export. On the other hand, European countries that denominates its goods and services in euros will have lost competitiveness to the Canadian dollar. The price of European products denominated in euros will thus become more expensive in Canada.

The appreciation of a country's currency refers to an increase in the value of that country's currency. Continuing with the CAD/EUR example, if the Canadian dollar appreciates relative to the euro, the exchange rate falls: it takes fewer Canadian dollars to purchase 1 euro (1 EUR=1.5 CAD → 1 EUR=1.4 CAD). When the Canadian dollar appreciates relative to the Euro, the Canadian dollar becomes less competitive. This will lead to larger imports of European goods and services, and lower exports of Canadian goods and services.

http://en.wikipedia.org/wiki/Currency_appreciation_and_depreciation

So, Taka depreciated over last 6 years against USD.

 

[eastwatch]

You sure?

In 2007, Aug 03, 1 USD = 68.51 BDT
In 2013, Aug 23, 1 USD = 76.85 BDT

(76.85-68.51)= 8.34 BDT

So now we have to pay 8.34 BDT more than before against 1 dollar. So the change is [(76.85-68.51)\68.51 * 100] = 12.17%.

So which one is appreciated? Taka or Dollar?




So, Taka depreciated over last 6 years against USD.

Yes, you are very right to say that Taka has depreciated against dollar during, not only the last six yrs, but also in the last 42 years. A dollar was worth less than Tk28.00 in 1975. Now it is Tk77.00.

Now, BDT has depreciated by {(77.0 - 28.0)/28.0 } x 100 = 175% during the last 38 years, and the average rate of depreciation is 4.6% per year.

So, BD economy must be in a horrible state.

 

[Skies]

Yes, you are very right to say that Taka has depreciated against dollar during, not only the last six yrs, but also in the last 42 years. A dollar was worth less than Tk28.00 in 1975. Now it is Tk77.00. No great amount of energy is needed to calculate that Taka has depreciated.

Sorry if i made a mistake, Taka has appreciated over years for sure, so does USD too. But overall, BDT has depreciated to USD over years, but it has appreciated its own value. So Taka is stronger than before.

 

[conworldus]

It is a passing thing.

The fundamentals of the economy remain strong and it will bounce back soon.

Really? You have sub 5% growth for a economy with a low base, a huge trade deficit, huge government deficit and stubbornly high inflation, so please educate me what fundamentals am I missing?

 

[UKBengali]

Yes, you are very right to say that Taka has depreciated against dollar during, not only the last six yrs, but also in the last 42 years. A dollar was worth less than Tk28.00 in 1975. Now it is Tk77.00.

Now, BDT has depreciated by {(77.0 - 28.0)/28.0 } x 100 = 175% during the last 38 years, and the average rate of depreciation is 4.6% per year.

So, BD economy must be in a horrible state.

This is not a correct conclusion to make at all!

All emerging economies, that are export reliant, do like a weak currency in order to maker their exports competitive. Even China's currency was deprecating till 2005 against the US dollar.

As for the percentage depreciation for Taka versus Dollar over the last 38 years, then it would be around 3% a year as you have not accounted for the compounding effect.