DESTITUTE RUPEE MAY TOUCH 75 IN NEAR MONTH AGAINST ONE DOLLAR
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| DESTITUTE RUPEE |
dEC
December 15, 2011. If no concrete steps are undertaken by RBI and
government of India to stop fall of rupee in international currency
market, the destitute rupee may slide to 75 against dollar in the coming
months. The worst-hit Asian currency this year is rupee which has lost
over 18 percent since the beginning of the year.
The continuous fall of rupee against dollar is reminding me “Draupdhi cheerharan” and to arrest fall of modesty of rupee, the country is waiting for Krishna to come as the RBI and government are muke spectators. while rupee is loosing its all modesty despite wide spread reforms being carried out in India since 1992 as per Manmohanoeconomics.
The continuous fall of rupee against dollar is reminding me “Draupdhi cheerharan” and to arrest fall of modesty of rupee, the country is waiting for Krishna to come as the RBI and government are muke spectators. while rupee is loosing its all modesty despite wide spread reforms being carried out in India since 1992 as per Manmohanoeconomics.
This
shows that the government which had been promoting economical reforms for the
last many years have proved fictitious. Subsequently, the strength of rupee
should have gone up instead of falling. "India Rupee Falls to Record Low Versus Dollar as Industrial Output Shrinks"
The
foreign exchange reserve which was created has proved as hoax due to FDI investment
in share market rather than in
industries. If the government has encouraged the FDI to invest in industries as
there is permanent demands in our country due to emerging market, the rupee has
not seen the ugly face which it has been showing.
What the ungrateful day is today when the rupee touched the 54.19- level for the first time in its history against the dollar on sustained capital outflows due to constantly fall of share market. It appears that the country is heading towards chaos. The Indian currency is going to witness sustained pressure in the coming days.
Foreign
exchange dealers said the local currency was weighed down on the dollar gaining
strength in the overseas market, particularly against euro, amid the lingering
Eurozone crisis. Dealers and speculators are buying more and more dollar with a
view of strengthening of dollar further resulting fall of shares market.
The FDI are also remained deeply worried about India's growth story. All our economics data are showing slowdown, rising fiscal deficit and widening current account deficit have badly lowered the investor confidence in our country story of growth.
The FDI are also remained deeply worried about India's growth story. All our economics data are showing slowdown, rising fiscal deficit and widening current account deficit have badly lowered the investor confidence in our country story of growth.
The
only positive, which can uplift the rupee is if the Reserve Bank does not take
any rate action in its mid-quarterly monetary policy review on December 16, the
chances of which is very dim since the foreign exchange reserve has fallen to US$302
billions less than the foreign exchange debt on country e.i. US$317 billions.
Despite
the fall in rupee the import from durable items are on the rise, but if at any
level it falls drastically it can prove an opportunity for our local industries
to produce the goods as import substitute to beat China. The IIP data is indicating a negative growth of 5.1% as
compared to a positive growth of 11.3% for October 2010.
Though, the inflation has come down which can be said is due to arrival of fresh vegetables in abundant in the market which have pulled down the price of onion, potato, cabbages,carrot, , wheat, paddy etc. The food inflation has come down to nearly 4-years low o 4.35%, and in the coming month, this will go down further as the supply of seasonal vegetables increase.
The rupee falling can further tighten the
money market because our import all the times remains more than export, the gap between export and import can
suck further money from the market. Fall of rupee can also rise price of capital goods, and imported goods resulting in further contract the import goods supply too which can bring un-predictable result.
The
RBI is helpless to recover the rupee losses due to higher foreign debts, so if
the Eurozone crisis do not improve whose chances are bleak, one can expect that
rupee may touch 75 against one dollar because we can not cut our import bill
but export data can go down further with the escalation of Eurozone crises.
