Rupee rises most among major emerging market currencies since August 2013 low

[Indo-guy]

Rupee rises most among major emerging market currencies since August 2013 low - The Times of India

The rupee has logged the smartest gain among major emerging market currencies since touching a life-time low in late August. On Tuesday, the Indian currency reached a seven-month high of 60.60 to the greenback in early trade before retreating to close at 60.95, nine paise weaker than Monday.

At Tuesday's close, the India currency has appreciated 11.4% against the US currency since the record closing low of 68.83 to a dollar on August 28, with the Malaysian ringgit being distant second with a 1.5% rise during this period. The rupee has gained 119 paise in the last five trading sessions on the back of a healthy current account deficit scenario and greater comfort with the US stimulus withdrawal.

This is good news for imports, including petroleum and edible oil, and for those looking to travel overseas. But, a stronger rupee means that those who depend on remittances from relatives abroad, will get fewer rupees for every dollar that they receive. Similarly, exporters will see a dip in realization, although they never managed to realize the full benefit of a weak rupee as overseas buyers whipped away some of the upside by reducing the dollar price of the goods bought from Indian manufacturers.

Analysts are predicting further strengthening. In a note, Barclays said the Indian currency could be trading at 59 to a dollar in a month.

The rupee has gained as a result of a series of measures introduced by the government and RBI to put a check on wasteful dollar outflows such as those on importing gold. As a result, the trade deficit has shrunk.

Officials said with an improvement in the overall situation, the remaining restrictions would be done away with. But, the government doesn't seem to be in a hurry to ease the gold import curbs.

 

[thesolar65]

Just compare the posts in Aug'13. How our two neighbors along with a smaller stooge were writing dooms day stories on Indian economy!!

 

[Indo-guy]

Just compare the posts in Aug'13. How our two neighbors along with a smaller stooge were writing dooms day stories on Indian economy!!

fundamentals of Indian economy as the youngest and the broadest economy remains strong !

This news only confirms our reiterations that the troubles will pass .

RBI Governor is doing great job .

One of the few good decisions MMS made in his tenure of 10 years was to appoint Raghuram as RBI Governor ....

 

[my2cents]

fundamentals of Indian economy as the youngest and the broadest economy remains strong !

This news only confirms our reiterations that the troubles will pass .

RBI Governor is doing great job .

One of the few good decisions MMS made in his tenure of 10 years ....

Still, too many regulations and taxes are stifling the economy and growth. I just saw this funny but true post on my email.

Tax Structure in India funny But True.

Question 1.. : What are you doing?
Ans. : Business.
Tax : PAY PROFESSIONAL TAX!

Question 2 : What are you doing in Business?
Ans. : Selling the Goods.
Tax : PAY SALES TAX!

Question 3 : From where are you getting Goods?
Ans. : From other State/Abroad
Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI

Question 4 : What are you getting in Selling Goods?
Ans. : Profit.
Tax : PAY INCOME TAX!

Question 5: How do you distribute profit ?
Ans : By way of dividend
Tax : PAY DIVIDEND DISTRIBUTION TAX

Question 6 : Where you Manufacturing the Goods?
Ans. : Factory...
Tax : PAY EXCISE DUTY!

Question 7 : Do you have Office / Warehouse / Factory?
Ans. : Yes
Tax : PAY MUNICIPAL & FIRE TAX!

Question 8 : Do you have Staff?
Ans. : Yes
Tax : PAY STAFF PROFESSIONAL TAX!

Question 9 : Doing business in Millions?
Ans. : Yes -- Tax : PAY TURNOVER TAX!
Ans : No -- Tax : Then pay Minimum Alternate Tax

Question 10 : Are you taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary.
Tax : PAY CASH HANDLING TAX!

Question 11 : Where are you taking your client for Lunch & Dinner?
Ans. : Hotel
Tax : PAY FOOD & ENTERTAINMENT TAX

Question 12 : Are you going Out of Station for Business?
Ans. : Yes
Tax : PAY FRINGE BENEFIT TAX

Question 13 : Have you taken or given any Services?
Ans. : Yes
Tax : PAY SERVICE TAX

Question 14 : How come you got such a Big Amount?
Ans. : Gift on birthday.
Tax : PAY GIFT TAX

Question 15.: Do you have any Wealth?
Ans. : Yes
Tax : PAY WEALTH TAX

Question 16 : To reduce Tension, for entertainment, where are you going?
Ans. : Cinema or Resort.
Tax : PAY ENTERTAINMENT TAX

Question 17 : Have you purchased House?
Ans. : Yes
Tax : PAY STAMP DUTY & REGISTRATION FEE

Question 18 : How you Travel?
Ans. : Bus
Tax : PAY SURCHARGE

Question 19.: Any Additional Tax?
Ans. : Yes
Tax : PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THE CENTRAL GOVT.'s TAX

Question 20: Delayed any time Paying Any Tax?
Ans. : Yes
Tax : PAY INTEREST & PENALTY

21) INDIAN : Can I die now??
Ans : Wait we are about to launch the funeral tax!

 

[doublemaster]

fundamentals of Indian economy as the youngest and the broadest economy remains strong !

This news only confirms our reiterations that the troubles will pass .

RBI Governor is doing great job .

One of the few good decisions MMS made in his tenure of 10 years was to appoint Raghuram as RBI Governor ....

Yeah, So chidambaram has no role in it? I mean bringing back economy?

 

[Indo-guy]

Yeah, So chidambaram has no role in it? I mean bringing back economy?

Yes Chidambaram had role in destroying economy along with Pranab Mukherjee over last 10 years ....

So he had a role to play ....
Because unless you go down , you can't climb back .

so full credit to Chidambaram in destroying Indian economy ant taking it back to 1992 level ....

 

[doublemaster]

Yeah, So chidambaram has no role in it? I mean bringing back economy?

Probably u posted a article which did not mention about main reason of Rs appreciation. Thats CAD control, that mentions chidambaram.

Yes Chidambaram had role in destroying economy along with Pranab Mukherjee over last 10 years ....

So he had a role to play ....
Because unless you go down , you can't climb back .

so full credit to Chidambaram in destroying Indian economy ant taking it back to 1992 level ....

All those currencies which lost value had best of their government. For example Turkey. Every one used to give credit to him for turkey development. Currency lost value, economy gone down at their ruling itself...They were best performers. Think ur self.

 

[Indo-guy]

Probably u posted a article which did not mention about main reason of Rs appreciation. Thats CAD control, that mentions chidambaram.



All those currencies which lost value had best of their government. For example Turkey. Every one used to give credit to him for turkey development. Currency lost value, economy gone down at their ruling itself...They were best performers. Think ur self.

Now rhetoric apart, let me be objective and honest.
yes some credit to Chidambaram for bringing down CAD .


But large credit goes to RBI Governor for his shrewd policies ( and I have already credited MMS for bringing this smart man to India from US ....)


But no doubt that policies of UPA ..took Indian economy to such critical situation ....

 

[anant_s]

The credit must really go RBI Governor Rajan. Even with limited powers he has done a commendable job. However, the challenge lies in reviving the growth and checking inflation, that will take care of other worries. Infact today there is a news article indicating RBI may have to buyback dollars to prevent Rupee from appreciating to levels where exports are impacted.

MUMBAI: Just a few months ago, the Reserve Bank of India had to sell record amounts of dollars to prevent the collapse of the rupee as global investors fled the market because of a deteriorating economy and talk of the US Federal Reserve scaling back its stimulus programme, among other reasons.

But the central bank may soon start having to buy the US currency to prevent the rupee from strengthening to a point where it starts hurting the economy. It may also buy from currently copious inflows to create a foreign exchange reserve buffer that would be about 10% lower than what it was in 2008, when the global financial crisis broke out, sparking a market rout. Dollar purchases will also protect exports from getting hit by weakening emerging market currencies, including the Chinese
yuan, said traders and economists.

The Indian rupee's gain of nearly 4% since Raghuram Rajan took over as central bank governor in September may be a sign of approval for his policies.

But keeping exports healthy is critical as they have helped in lowering the current account deficit, which had widened to a record last year.

Worryingly, exports contracted in February after a seven-month expansion run, the government said on Tuesday. Meanwhile, expectations of a stable government after the upcoming elections have buoyed markets, which is adding to rupee gains as foreign investors have rushed in, driving stocks to successive records.

With global trade in flux and China possibly set to depreciate its currency to boost slumping exports as domestic growth slows, India's central bank may have few options left.

"RBI should be buying dollars now," said Ananth Narayan, managing director (global markets) at Standard Chartered Bank. "When the vulnerabilities are still there, it may be judicious for RBI to buy dollars."

Some companies would prefer a stronger currency, especially those with overseas debt. It will also lower the cost of imports, which would be detrimental to domestic industry as has happened in the past.
The sharp fall in the currency last year helped revive exports and contain imports as they became expensive. Restrictions on gold imports also helped narrow the current account deficit, the difference between spending overseas and exports, to 1.9% of gross domestic product in the December quarter, from 6.5% a year earlier.

The rupee ended 0.2% lower on Tuesday, near a seven-month high of 60.75 to the dollar. It was the worst-performing major emerging market currency last year, when it fell to a low of 68.84 to the dollar on August 28.

Foreign portfolio investors have pumped nearly $6.5 billion into Indian debt and equity since January. Allowing this to continue boosting the currency without building up reserves may expose India to volatility when the tide turns, for instance if the electoral verdict is indecisive.

Foreign exchange reserves are at $294 billion, up from last year's low of $274.8 billion, which was the week in which Rajan took charge. Reserves hit a peak of $326 billion in May 2008, when the country's overseas debt was at $224.6 billion. Overseas debt is currently at about $400 billion. Apart from portfolio inflows, $34 billion has come in due to the central bank's special subsidised deposit scheme for non-resident Indians. In a way, this too is debt that has to be repaid.
"Reserves as a ratio haven't moved in the past four years," said Siddhartha Sanyal, economist at Barclays, whose short-term rupee target is 59 to the dollar.

RBI may have to buy dollar to keep rupee on leash - The Economic Times

 

[Indo-guy]

The credit must really go RBI Governor Rajan. Even with limited powers he has done a commendable job. However, the challenge lies in reviving the growth and checking inflation, that will take care of other worries. Infact today there is a news article indicating RBI may have to buyback dollars to prevent Rupee from appreciating to levels where exports are impacted.



RBI may have to buy dollar to keep rupee on leash - The Economic Times

RBI Governor has done his job to stabilize the economy with short time he had .

New government will have to work overtime to bring back economy on track of high growth .

It is going to take lot of unpopular and hard decisions to do that .

The credit must really go RBI Governor Rajan. Even with limited powers he has done a commendable job. However, the challenge lies in reviving the growth and checking inflation, that will take care of other worries. Infact today there is a news article indicating RBI may have to buyback dollars to prevent Rupee from appreciating to levels where exports are impacted.



RBI may have to buy dollar to keep rupee on leash - The Economic Times

Raghuram Rajan knows his job. He was the one who prophetically predicted doom that awaited in 2008, few years before even as he fought lonely battle with wall street giants ....and he stuck to his analysis .

He would know when to reverse the current policies ...

It's pretty double edged sword .

so far all his policies have worked well ....

and it's only the beginning of tough season ahead ....