we still have long run to get better economy right now we have to concentrate on export so it is better if we cheap like chiana's goods so for export industry it is not good ,still we have to keep our currency low so all big company come to india for production so we can get work and technology ,so just like chiana we have to keep our currency low
Hi Guys, this is high time for more US acquisitions, before US dollar appreciations (which may be in in near future!!) I donno when it will. Indian businesses should start acquiring more US companies/businesses taking advantage of INR appreciation against USD. Later they can benefit when US economy/USD got back its position. It is like wise investment!!
RE:Rs Vs Dollar
by indiman on Jul 24, 2007 02:58 AM Permalink
Inflation in India has prevented the RBI from stopping the appreaciation of Rupee at 45 Rupees per dollar. RBI keeps the rupee weak against the dollar by buying lots of dollars coming from foreign investments going through various banks, IOB, SBI etc... But more and more dollars RBI buys the inflation in India bacomes higher because more dollar bought means more Rupees sold to banks like IOB, SBI, this means more money in India chasing few goods which is inflation, which is why the commodity prices were so high recently. Due to the inflation risks RBI has let the dollar slip to 40 Rupees but is trying to hold it there. When the Inflation comes back again due to all the excess Rupee in the system and public pressure increases RBI will have to stop buying dollars and at that time thr Rupee will increase further. This cycle will continue till the US increases their interest rate or acts on the fundamental problems in their economy which is astronomically high budget and trade deficit. There is nothing much that can be done by foreign banks like RBI other than the above. The other solution is the exporters raise the price of goods sold to America or set up production, service centres in America which is becoming. The risk of what the RBI is doing is great because the tiger economies of east Asia did the same thing five years ago, Mexico as well i.e. artificially prop up the dollar to keep their currencies weak and all those economies imploded. So if RBI doesent watch out carefull
RE:Rs Vs Dollar
by ASHOK on Jul 24, 2007 08:20 AM Permalink
Agreed with your analysis.
next step should be import of Capital goods with this weak USD. Why India is failing to do that !!! Instead India is happily building its reserves and counting the low interest rate on its US Bonds !!!
It has been more than 3 , since Montek singh mooted the idea of utilising a very smallpart our FE reserves to support India Infrastructure needs.
It will take 10years for nuclear power plants, till than we can invest in Gas based power plants. Finally we need electricity at competitive rates.
RE:Rs Vs Dollar
by Maharaj Malik on Jul 24, 2007 02:27 AM Permalink
no ..u r not 100% right..10% right may be.. 1. dollar is weakin' globally. Some oil producing countries pegging their currency with EURO and other currency basket. 2.US economic outlook is gloom, fed is toying with interest rate, housing sector gloomy , lowering demand in US
If the dollar keeps on falling, than why are world business still conducting business in dollars? Why are countries reserves still held in dollars? Please can someone share the mustery?
RE:I WONDER WHY
by Blazer on Jul 24, 2007 03:02 AM Permalink
ASEAN Countries tried in 1997-98. US just killed their economy. Saddam Tried, Iran trying.
In today's reality US economy is Bad and US is aware of that. No Country can be economically no 1 for ever and it looks like US decline has started unless they come up with something new.
RE:I WONDER WHY
by Zameer Deshmukh on Jul 24, 2007 02:16 AM Permalink
Some countries have already started conducting business in currancies other than dollar. More will follow the suit. This doesnt happen in ver short period of time.
RE:I WONDER WHY
by Maharaj Malik on Jul 24, 2007 02:36 AM Permalink
the simple answer golder drops are pegged to usd..the moment the focus shift from usd to other currency like it has started in some case
RE:I WONDER WHY
by indiman on Jul 24, 2007 03:07 AM Permalink
This is because oil can be only bought in US dollars at the only two oil exchanges in the world- The New York Mercantile exchange and the London exchange. This is due to secret agreement between OPEC led by Saudi Arabia and the United States after 1970s. So the US can keep printing billions of dollars and pump into the world system but the world countries have to keep buying the dollar inorder to buy Oil. This is why the Saudi governments lending rate exactly match the US lending rates. Saddam Hussein tried to throw a spanner in the works by saying he was going to sell oil in euro and he was taken out. Iran has gone one step furhter and set that they are going to set a oil exchange in Kish Island in Iran where Oil will be sold in Euros or the local currency. That move if that happens will shake the world and importantly US thats why all the war rhetoric against Iran. If Iran gets the nuclear bomb I think they will put their plan in place, thats why the US and Saudi Arabia is pulling all stops to prevent that. Till the day three or four major oil producing countries can say we will sel Oil in another currency all the countries in the world have to keep a good chunk of dollar reserves and the US will keep printing dollars and spending lavishly. This might be a reason why the US hasnt really pushed on Alternative sources of energy other than Oil because that will be a big blow.
RE:I WONDER WHY
by Ek Hindustani on Jul 24, 2007 03:22 AM Permalink
I was contemplating of throwing some light on the issue, but you coudlnt have said it and summed it better Indiman. Good analysis. I back this up. This is precisely what has happened. Also I'd like to add that the Venezuela's President is wanting to do the same, trade oil in Euros, thats why they are after him as well. The day Oil is traded in Euro's that will mean an END ot the US super power status. and that is what they are defending in the name of war on terror and war on islam as it is easier to occupy and control people under that guise for PR purposes and to fool their own citizens and the worlds. rather than go all out and say they are going in for oil. Its simple, if they really wanted to fight wars for human rights there are hundreds of other places they can go and occupy but do they do that. You guessed it right . NO. Anyhow. Its important for India to be smart here, as the coming super power and not get blown over in any scenario and to diversify, RBI should start buying EURO's and keep a decent bank of it. My two cents. Hindustan zindabad.
One must not the external factors that affect the rupee dollar relation. If there is a significant terror attack in Mumbai or Bangalore damaging IT infrastucture.. FII's will run with their money. Rupee will fall.
Chances of war between India and Pak seem quite low at this time but things between these two nations change quickly and this will be a burden on economy as the Iraq war is on US and this will bring down rupee. Third factor is Oil.. Oil is traded only in USD so if the oil prices go up significantly more USD will be in demand and thus disturbing the rupee dollar relation..
Of course none of this are very likely at the moment but their re
RE:Terror attack or war or Oil
by Blazer on Jul 24, 2007 02:50 AM Permalink
Don't you think US FII Investment is now in India hence the Rupee is Stronger.Tomorrow if the FII finds someother place more lucrative than India then the entire investment is diverted. Very few Indian Companies are taking advantage out of it. Banking Insurance, Healthcare everything is now in the hands of MNC's who thinks the entire globe is their Home.
RE:Terror attack or war or Oil
by Zameer Deshmukh on Jul 24, 2007 02:24 AM Permalink
Oil prices have been on rise for past several months, infact for a few years. Still dollar is in dolldrums!!
RE:Terror attack or war or Oil
by Ek Hindustani on Jul 24, 2007 03:26 AM Permalink
Watch out for false flag operations like the 911 orchestrated the world over. One is long time coming to make the Iran Invasion happen as a retaliation. The US will stop to no limit to maintain their supremacy in the world, and to maintain their petro-dollar. They will orchestrate fights and wars, directly and indirectly. I just hope and wish that the true nature of the guilty is revealed and justice brought about to this world.
Almost no one is saving any money in the United States today. Many don't have any money to save or simply don't want to save. Saving rates are very low or negative in many US states. The US government debt grows by about $1.3 billion per day and has now crossed more than $13.2 trillion dollars. The US private household debt has now crossed more than $14.7 trillion and half of these debts have been incurred after 1998. The fact is that the expanding consumer debt drives the US economy. The Americans are enjoying the present spending spree at the cost of their own future and future generations. In the near future, many Americans might have to face harsh reality like a poverty-stricken, third world family, living from hand to mouth situation without any kind of financial reserves whatsoever. The imminent economic crisis is waiting to happen in the US and will be most thoroughly predicted one in recent human history.
RE:US IS HISTORY......CHINDIA IS THE FUTURE.... WELCOME TO INDIA
by Sameer on Jul 23, 2007 10:51 PM Permalink
Wow. So is the US of A going to become another Somalia?
RE:US IS HISTORY......CHINDIA IS THE FUTURE.... WELCOME TO INDIA
by Ek Hindustani on Jul 24, 2007 03:32 AM Permalink
The US of A is marching towards and orchestrated Marshial Law. The Military Industrial complex has deliberately let things come to this level and are letting things deteriorate consistently. Also, Like all of us know - MNC's and guys with money (5% Americans) treat their world as home. They dont care if their money is in America or India or China, as long as it is under their name and control. They have deliberately orchestrated this economic demise of America, so that recessions kick in and large unemployment lines increase and it will be easier for them to recruit these unemployed to fight endless wars to take and keep control of the worlds OIL reserves. Make no mistake about this, they know whoever controls the gas pump controls the economy of the world. China and India can develop as much as they want at any pace, but to make the economies owrk and move product and people they will need OIL - ENERGY and they will ahve to go to thse (5% rich people) to buy it, and they will contorl the world. This is their plan. Watch out how this will pan out. and Remember my words. Dont think they care for America anymore, they only care for the almighty Dollar and are using America and eating away every thing that stands in America like a cancer. ITs a doom and gloom scenario for some of you, but for those who are aware of the going on's will agree with me. Pass the torch of wisdom
RE:US IS HISTORY......CHINDIA IS THE FUTURE.... WELCOME TO INDIA
by Blazer on Jul 24, 2007 02:55 AM Permalink
One day Mayawati becomes the PM introduces 60% reservation in Pvt Sector and all this good work will go to dogs... In India anything is possible. Unlike US in India the Corporate community doesn't control the GOvt
RE:US IS HISTORY......CHINDIA IS THE FUTURE.... WELCOME TO INDIA
by Arrow on Jul 24, 2007 04:01 AM Permalink
100% for SC / ST and tribal people. All MBC, OC, BC go to the hills. President should pass an ordinance to create 1000 new castes so that we can sit and discuss whether they are BC, MBC & then start quota for them.. he he he!
RE:US IS HISTORY......CHINDIA IS THE FUTURE.... WELCOME TO INDIA
by Raja on Jul 24, 2007 12:08 AM Permalink
Friend, going by your predictions, it would have a very bad impact on indian/chinese economy
Everyone is crying due to appreciation of Rupee.Our economy is growing.These things will happen due to economy is heating.For a long term prespective it will help our countrys economy. We have to find other alternatives like euro or sterling for export business.Locate rawmaterials in abroad and buy it in dollar terms and export as a value added product in euro terms.Simply telling that exporters are not benefitting is just ridiculous.by vipranandu
RE:dollar value decelerates
by subbu on Jul 23, 2007 11:35 PM Permalink
but u might find US army invading us like they did to iraq because iraq tried to sell oil in terms of EURO.
RE:dollar value decelerates
by Zameer Deshmukh on Jul 24, 2007 02:31 AM Permalink
Dont worry about US. It has no might to invade India. Vijayprabha has made a good point.
RE:dollar value decelerates
by Sriram on Jul 24, 2007 02:41 AM Permalink
Right, and spend more money that they don't have? They've already spent close to $600billion of federal funds in the iraq war(which will no doubt be recovered by American companies in reconstruction contracts but it is still federal money gone). and yeah, america will not wage wars anymore for economy's sake - they're more mature than that... (at least when Bush does not take executive power to an extreme)
