Why Is The Rupee Falling ? All You Wanted To Know

[Anta Assamey]

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To summarise the collective commentary on why the [url="http://ibnlive.in.com/newstopics/rupee.html"]rupee [/url]is falling, the immediate triggers are the imposition of capital controls last Wednesday and the hike in import duties on 'non-essentials' like gold and flat screen TVs. The Reserve Bank reduced the amount that individuals could take out of the country from $ 200,000 to $ 75,000 and overseas investment by companies to an amount equal to their net worth from four times earlier. Indian companies had invested a little over $3 billion abroad in the last fortnight of July.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
These measures were meant to reduce the gap between imports and exports by $ 17 billion to a rather comfortable $ 70 billion or 3.7 per cent of GDP. Shaky investors feared that a panicky government on a slippery slope would not hesitate to resort to more desperate measures despite assurances by finance ministry officials and government leaders. There is no clear indication, however, that foreign institutional investors are heading towards the exits. With the dollar fetching more rupees, and Indian bond yields rising, they should be investing. On 16 August, a day after capital controls were announced, their net investment in debt and equities was $ 323 million, but it was negative on Monday, 19th August.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif][b]
ALSO SEE [url="http://ibnlive.in.com/news/live-indian-rupee-recovers-marginally-goes-below-64-vs-us-dollar-sensex-above-18000-mark/415685-7.html"]Rupee recovers marginally, goes below 64 vs US dollar; Sensex above 18,000 mark[/url][/b][/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
The strengthening of the US economy suggests that the US central bank will reverse its easy money policy from September itself. For India this is a bigger worry. Higher yields are attracting money to safer US treasury bonds from risky emerging [url="http://ibnlive.in.com/newstopics/markets.html"]markets [/url]with big uncovered import gaps like India, Indonesia, South Africa and Brazil.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif][size=1]


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Though P Chidambaram is making a valiant attempt to reduce government expenditure, there is doubt in his ability to stick to targets.[/background][/size][/color][/size][/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
Though Finance Minister P Chidambaram is making a valiant attempt to reduce government expenditure and the gap that must be met by borrowing (as this pressures inflation and interest rates), there is doubt in his ability to stick to targets.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
Oil prices are rising, and a weakening rupee is stretching the import bill. Unless the government raises fuel prices - mainly diesel - the subsidy burden will rise, defeating Chidambaram's efforts to an extent. The Oil Minister has indicated that diesel rates will be raised by Rs 2 to 3 a litre, but this is unlikely to happen when Parliament is in session.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
So far the Reserve Bank has not tried to defend any particular level , but has only eased the fall, and there is appreciation of that. The rupee may have cheapened to its real effective exchange rate, but analysts feel that it might overshoot to 67 over the next three to six months before clawing up on the strength of cheaper exports.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
A crisis is a time for the government to act. For example, how about persuading the Supreme Court to lift the ban on mining (and export) of iron ore? How about cracking down on the Regressives in the Railway Board who have blocked foreign investment in the railway engine plants at Madhepura and Marhowra in Bihar? The Railway Ministry has only now invited requests for qualification from global players. Companies like Alstom and GE have been wanting to invest for nine years. Rather than parting them delightedly of their money, the Prime Minister has been writing plaintive letters to the Ministry month after month. The Congress Party, led by Rahul Gandhi, has played politics with Vedanta's aluminum plant in Odisha in the name of respecting the religious practices of the Niyamgiri tribals, when it should have brokered a mutually beneficial solution.[/font][/color][color=#3C3D3D][font=Arial, Helvetica, sans-serif]
And since rising bonds yields have not helped the rupee, perhaps the Reserve Bank must give up the effort and signal a shift to lower interest rates. That could lift the gloom in Indian industry and get the investment cycle started. Let's have growth rather than be obsessed with inflation.[/font][/color]

[k2s]

[quote name='Chitti_the_ROBO3' timestamp='1377001903' post='1304138160']
economics knowledge -100/100 ...


can any one explain... enduku anthaa tens padalsina avasaram undhaaa?? suppose rupee 100 ki poindi anukoo people ki elaa loss & country ki elaa loss? and enduku padipothundi... what about pakisthan srilanka bangla nepal??

[size=8]plzz don't copy paste kuppal kuppal pages.. just own words lo explain cheyandi.. or meru copy paste cheyseyvi nenu google lo choodagalanu kadha ikkada adagalsina avasaram ledu kadhaa...[/size]

so telisinollu explain... teliyani vallu line lo nilchondi..

[img]http://24.media.tumblr.com/4edf07f444d1c672a842a2fca4194e82/tumblr_mqiz99Clrl1spvnemo1_250.gif[/img][img]http://24.media.tumblr.com/4edf07f444d1c672a842a2fca4194e82/tumblr_mqiz99Clrl1spvnemo1_250.gif[/img]
[/quote]

[Anta Assamey]

Okka word lo cheppatam Kastam... Oka Country economy ni oka word leka oka sentence lo cheppatam kastam.... Many factor that made us stand in the current situation... [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[Betting Bangarraju]

Only saving grace for India is Stop - Fuel Imports (Limited use), Cell Phones, Electronic items (TV's, Cameras...etc)

[PMREDDY19]

k2s uncle..

[Betting Bangarraju]

[quote name='Brahmanandam_AFDB' timestamp='1377030899' post='1304140617']
Okka word lo cheppatam Kastam... Oka Country economy ni oka word leka oka sentence lo cheppatam kastam.... Many factor that made us stand in the current situation... [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote]

Ivanni vinakoodadu, bharinchalem...etc lanti words oddu okka word ea kaavali ante.
Either [b]Google [/b]or [b]Sachipo[/b]...that's it.

[Anta Assamey]

[quote name='Betting Bangarraju' timestamp='1377030900' post='1304140618']
Only saving grace for India is Stop - Fuel Imports (Limited use), Cell Phones, Electronic items (TV's, Cameras...etc)
[/quote]

Practically not possible....Enduku ante demand tattukovali ante... Mana country first oil and gas explore chesi danni use cheyali... aa pani kanu choopu meralo kanipinchatledu..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[Anta Assamey]

[quote name='Betting Bangarraju' timestamp='1377030900' post='1304140618']
Only saving grace for India is Stop - Fuel Imports (Limited use), Cell Phones, Electronic items (TV's, Cameras...etc)
[/quote]


Nuvvu - Nenu daily groceries kuda India nunchi teppinchukundam...[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

Lets Help the Indian Economy Man.. [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[k2s]

[img]http://www.andhrafriends.com/uploads/profile/photo-thumb-11095.jpg?_r=1367303031[/img]

[Anta Assamey]

[quote name='Scrooge' timestamp='1377031672' post='1304140689']
[img]http://www.andhrafriends.com/uploads/profile/photo-thumb-11095.jpg?_r=1367303031[/img]
[/quote]

Ammayila Pics aite okati choosi vadilestava.. ledu ga... Idi matram oka work and oka line enduku.. mottam Chaduvu..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

Ee vantu ga... Daily Groceries India nunchi teppinchu.. Help Indian Economy..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[Betting Bangarraju]

[quote name='Brahmanandam_AFDB' timestamp='1377031130' post='1304140632']
Nuvvu - Nenu daily groceries kuda India nunchi teppinchukundam...[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

Lets Help the Indian Economy Man.. [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote]

Smaaaaaaaaaart boy.....ee saari one suit case ninda rice inko suit case lo full masala, curry pogadru. Cabin baggage lo new cut drayers, baniyan's etantav ? [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[Anta Assamey]

[quote name='Betting Bangarraju' timestamp='1377031798' post='1304140703']

Smaaaaaaaaaart boy.....ee saari one suit case ninda rice inko suit case lo full masala, curry pogadru. Cabin baggage lo new cut drayers, baniyan's etantav ? [img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote]

Appudu Flight ticket kaadu oka Cargo Flight konukovali...[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[k2s]

[quote name='Brahmanandam_AFDB' timestamp='1377031732' post='1304140694']

Ammayila Pics aite okati choosi vadilestava.. ledu ga... Idi matram oka work and oka line enduku.. mottam Chaduvu..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

Ee vantu ga... Daily Groceries India nunchi teppinchu.. Help Indian Economy..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote][img]http://i1354.photobucket.com/albums/q681/mutamesthri/kota-yamaleela-1-o1_zpsac56a8ac.gif[/img]

[Betting Bangarraju]

[quote name='Brahmanandam_AFDB' timestamp='1377031919' post='1304140711']

Appudu Flight ticket kaadu oka Cargo Flight konukovali...[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote]

Yes adikooda marchipoku....Indian Airlines cargo services ea vaadukovali....[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]

[aks21]

[quote name='Brahmanandam_AFDB' timestamp='1377031101' post='1304140630']

Practically not possible....Enduku ante demand tattukovali ante... Mana country first oil and gas explore chesi danni use cheyali... aa pani kanu choopu meralo kanipinchatledu..[img]http://www.nandamurifans.com/forum/uploads/sml_gallery_8818_2_84295.gif[/img]
[/quote]
adi antha easy kaadu bhayya... nenu ikkada oka oil&gas company lo sestha.... oka site lo oil unte danni comercial cheyadaniki almost 30 years pattindhi annaru ikkada... ade mana deggara inka late aithademo....