Five reasons why the rupee is sliding against the dollar
PrintListen to this Article
-
Dollar strength: The dollar index is up nearly 5 per cent this year on signs of growing economic momentum and talk of an early end to the Fed's stimulus effort. Most global currencies have weakened against the dollar including India's rupee.
-
Weakness in domestic equities: The BSE Sensex has fallen nearly 4 per cent over the last week. The selloff has been triggered by foreign institutional investors, who have sold about Rs. 3,900 crore worth of index futures in the last four trading sessions. This is a hedging move as FIIs expect stocks (cash segment) to fall in the near term, traders said. FIIs have been a key support for markets (and the rupee) after buying a net $15.38 billion (Rs. 90,000 crore) worth of shares this year as of Wednesday's close.
-
Demand from oil importers: India has to import crude oil to meet its domestic requirement. Traders say there has been continuous demand for the greenback from oil importers, the biggest buyers of dollars in the domestic currency market, pushing the rupee lower. Oil and gold imports account for 35 per cent and 11 per cent of India's trade bill respectively.
-
Gold imports: Gold imports hit 162 tonnes in May, twice the monthly average of 2011 when they reached a record. Gold is the second most expensive import for the country after crude oil. Falling gold prices have offset the government's and the central bank's moves to reduce gold imports, which increase current account deficit and weighs on the currency. India's current account deficit was equivalent to a record 6.7 per cent of gross domestic product in December.
-
Weak economic fundamentals: Moses Harding of IndusInd Bank told NDTV that weak economy and no signs of a quick fix solution are weighing on the rupee. The UPA government is unlikely to deliver far reaching reforms to generate heavy capital inflows, as it did last September to stave off the loss of India's investment grade credit rating, experts say.
(NDTV & Reuters)
Category : International Business | Comments : 0 | Hits : 557
After a 12-month honeymoon with the Narendra Modi-government at the Centre, foreign investors appear to be losing patience, as a revival in corporate earnings is taking longer than expected time We continue to believe the market rally last year was mostly due to a global rally in equities, helped by a reduction in the two important tail risks for India – the currency, and a stable central government. The Indian market's price to earnings (P/E) premium to global equities P/E is current...
Foreign Trade Policy 2015-20 Unveiled: Aiming to nearly double India’s exports of goods and services to USD 900 billion by 2020 Commerce and Industry Minister Mrs. Nirmala Sitharaman unveiled the Prime Minister Mr. Narendra Modi-led government's new Foreign Trade Policy, 2015-2020 (“FTP”) on April 1, 2015 at the Vigyan Bhawan, Delhi, thus laying down a road map for India’s global trade engagement in the coming years. The new 5 year FTP provides a framework for increasing...
Business process has now turned to be complex followed with everyday changing dynamics of the same. Many organizations still follow the traditional Strategy formulation process where the senior team management takes the decisions based on available facts, formulates the strategy passes the same to the lower level management to execute followed with an monitoring system. This process of management policy frame work is traditional in terms of today’s changing market dynamics and compli...
When an Industry finds stupendous growth in the short term then Indian government places Brakes on such growth story in the long term of the Industry. Online business has made tremendous business revolution for every segment of the industry across the countries. India is now the emerging economy in terms of online business opportunity. We prefer every purchase over the online business portal. We visit less in the bank for any monetary transactions. We book our travel...
Start Your Team on the Right Path Any manager who has put together a team — be it large or small, in-person or virtual — knows how difficult it is to get a group started off right. Next time you have to launch a team, try these three things to improve your chances of success: Foster trust. People who trust one another tend to get work done quickly. Encourage an environment where people feel free to speak their minds. Quickly acknowledge mistakes. No group can s...
Comments