INR being killed in the FX market

A

abhi1984

Disciple
For the last few weeks, most mornings I keep reading how the INR is doing bad against the USD. Now it is getting absolutely killed. So I have been wondering - Why is this happening at all? Are our politicians/RBI good for nothing? Is there a price we are going to stop? already broke 65, so 70?
 
This is not just happening in India, it happening all over the world, the only difference is that INR is being hit more hard against $ :)

Just wait for the Federal policies next month, which will throw a much more clear picture of it :)
 
Read an article that the corrupt bureaucrats and politicians took away the cuts to such an extent, that the money which was left from the investors was only good enough for bringing in gfn chinese goods and sell those like resellers. No worthy investment was made in our own sectors and hence now we have debt staring at us in the face. Investors are bailing out and hence the steep drop in the Rupee's value.
We consumed the money more than invested in our country.

Despite everything, the Govt is not willing to bring any reforms to speed up action against corruption and instead is taking steps to tighten the noose on the few advantages the common man had to look upto.
 
^^ I guess Congress realises that they might not win the next elections, so they are trying to loot all they can.

Aside, actually as @Being.smart said similar situation is happening to all the currencies. I am not sure if anyone remembers but Indian stock market was one of the best performing after the 2008 crash. It picked pace too quickly. So what comes fast, will loose fast.
 
During and post recession Usa was no longer an investor friendly option, hence all money was flowing into developing nations where returns were obviously going to be better.
Now USA is showing revival and all FDI and FII money is going back to the states.
I dont think you can blame the government alone, but more so all politicians and decision makers for their short sightness. Let me tell you why. It was always a known fact that 80% of foreign investment was in the form of FII and 20 odd as FDI. This trend needed correction because it cause short term investment and not long term. What was needed post 2009 was to ensure that the fii's are converted into fdi's. Manmohan singh tried the same 2 yrs back if you guys remember, but the opposition and Mamta didnt let the bill pass. Thats why we are where we are today.
Lets not kid ourselves, india was never growing on its own at 8-9%. It was because others were not doing too well and the inflow of short term investment was high. Now that they are reviving, we are feeling the brunt.
If the federal policy gives a good picture for the states which i am sure is going to be the case, we are gonna be doomed.

We aint heading towards a crisis, this is a crisis.. Just that our dumb ass politicians and new channels are so busy bashing manmohan singh and praising modi, we have taken our eye off the real problem.

Oh and can this be controlled by the rbi??? HMMMM, one word, NO. That time has long gone.
 
Aint it funny that the country with the biggest debt is ruling the world :)
Read some where that The entire amount of the world's currencies cannot repay USA's debt.
Anyways.... With Rs touching a lowest of 65.56 to a dollar today and GBP already crossing the century I dont think things will change soon.... By soon I mean not at least in the next 3-4 years :(
 
^^ Link for the article
I read this for the first time. Anyways .... He stated the facts and media just tried to create some masala out of it.
The situation in our country is similar to what he said. Sad part it Govt is not even acknowledging the sorry state of affairs. Leave aside doing something to repair the damage. Sad.
 
manu1991 said:
Must read on this topic:
http://www.newslaundry.com/2013/08/hawala-logic/
Click to expand...

A good technical analysis kinda. The issue of FII and FDI is rightly pointed out in one of the post above. But that again points to coalition and lack of decision taking ability of current government. MMS is the one who was in center during opening markets in early 90's. He might be capable but as of now lacking decision taking ability or leadership. Also the funda of investing in gold is not new for Indian population. RBI and FinMin would be knowing it very well. Putting duties now is like locking stable after horses have ran. Motive behind restricting import of Gold is logical but not timely. Most of the Gold bought by Indian population goes in to lockers and does not remain in system but on the other hand $ are going out of the system to pay the import bills. This kinda does not balance out.

Also there will be more domestic issues with banks who have lent money to coal block companies. There was a nice explanation on this by one of prof in my college which included how banks diluted pre-conditions to save/sustaon their balance sheets and growth %.

At the end its one nation and deeds of some evil persons have to be suffered by everyone including good people.
 
Why blame the government only? FDI in retail was a way of getting investment into the country. But the opposition blocked it.
 
It was passed, but it also had a compulsory 30% local sourcing clause, which caused IKEA and Walmart (the biggest investors) to have second thoughts
 
abhi1984 said:
For the last few weeks, most mornings I keep reading how the INR is doing bad against the USD. Now it is getting absolutely killed. So I have been wondering - Why is this happening at all? Are our politicians/RBI good for nothing? Is there a price we are going to stop? already broke 65, so 70?
Click to expand...
I think its temporary and caused by external as well as internal factors. See this op-ed.

What goes up must come down. Anyone here remember when it was Rs.38 to the dollar. How long did that last. Same with this.
 
The way I see it politicians would be cashing in their Hawala investments as congress fears for not coming into power for next 10-15 years(at least). Hopefully as somebody else mentioned this phase is should be temporary.
 
Switch said:
The way I see it politicians would be cashing in their Hawala investments as congress fears for not coming into power for next 10-15 years(at least). Hopefully as somebody else mentioned this phase is should be temporary.
Click to expand...

This.
I was having a long discussion with one of my acquaintances who is quite knowledgable in these matters. He also told me many insightful details on the American economy and how dollar functions.
The best part of the discussion was when he told me about the 'American Housing Bubble burst' and how it was a big, govt sanctioned scam on the world.
 
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