All the messages posted are really inetersting to read. Myself being an NRI have noticed one crucial issue because of Rupee rising. Over the last 6 months there has been a 9% drop in Dollar to Rupee conversion. At the same time we are talking about curbing inflation in India by sticking to this rise in rupee against dollar. My Recent visits to India did not made me realise such a drop in Inflation levels in India, infact the country is going out of control. although Salary levels have been inflated to unimaginable levels, but general Public doesnt seem to be getting benefit out of it. Still the basic infrasturcture,fuel,cooking gas,etc is jumping sky high levels. The interest rates for bank deposits not very attractive, the housing intrest rates rising high. Taxation structure getting very complicated and not in proportion to salary levels being offered presently. There is struggle at every step for even the basic neccessities ? SO WHERE DOES THIS RUPEE RISING BENFITTING GENERAL PUBLIC????????? The Economy going strong because of strong rupee !!!!?????It looks like economy is bulldozing common public instead of making them strong. There is chaos and literally a sense of unrest among those NRI's who are conributing huge funds back home through currency Exchange back to India. They are not only adding to their wealth but at the same also bring in huge foreign exchange back to India. So isnt it right for them benefit being working away from Home. Think about it.....
RE:Rupee rising
by Mitul Mehta on Jul 25, 2007 11:39 AM Permalink
i dont agree... with rupee going strong against the dollar, the common man stands to have more economic power at a global level. Which also means that the domestic market will be even more lucrative for businesses.
It will also be cheaper for the government to invest in infrastructure (very much required) without much help from World Bank and therefore saving on interest costs.
The only ones who take the pinch are NRIs earning in Dollars. But that is just a handful.
The day INR appreciates to 20/$, flights to US will go empty.
Your Idea of flights going empty to US may happen, but flights may go to some other countries like Canada etc etc. With the volume of population India, even if 1Rs=1$ there is not going to be any change of people migrating.
RE:Rupee rising
by Vijeth CM on Jul 25, 2007 11:35 AM Permalink
Sameer, the real reason for inflation is 1) the companies/govt. which is benefit from the falling rupee do not pass on the benefits to the common man - they neither reduce prices of their products, nor improve the quality. 2) Low interest rates, easily available loans and rising income levels have led to the inflation.
However, with a little more patience, our country will surely benefit, may be during the next budget? 3)
RE:Rupee rising
by Niranjan Arsid on Jul 25, 2007 12:32 PM Permalink
What is the benefit to the country with the huge foreign exchange? This huge money is creating huge demand for each and every commodity. If you have more paying capacity then, naturally demand for the commodity rises. This way, only people like you are able to maintain a rich lifestyle and forget about the poor and people with lower incomes, cannot even think of spending like you do.
The exporting company are showing there disappointment since they they think there profit is sinking due to rupee appreciation. Do they ever thought in long term....
When rupee is stronger say 1 dollar = 1 rupee, its advantage india. since the major input to any exporting industry in india is oil based be it plastic, textile, agriculuture, when the cost of the oil is like Rs 60-70 per barrel..
obvisouly the final cost of the product is reduced...... its a common sense......
its like importing cheaper oil and supply cheaper or at competitive price..
As a developing nation we should think in broader way not think of only exporter or IT field.......
RE:Strong rupee
by philip xavier on Jul 25, 2007 12:02 PM Permalink
Mr. Kumar you are very optimistic.
Do you have any idea of the Salary in US?? Its an average of $2000 PM. Dont think that your salary is going to be Rs40000 when 1Rs=1$ your salary may go down by the same ratio.
Rupee has become stronger not due to our performance,its simply b'coz the dollar has lost its value...US economy is not doing well..and since our rupee is linked to dollar any change in dollar value will show its impact not only on rupee but the currencies the world over which are linked to dollar.. The Philiino Paisos are appreciating aswell..not due to any any developement in Philipines....cool down pals...the media is projecting a wrong image of India.
RE:Its really not rupee strong........
by philip xavier on Jul 25, 2007 12:04 PM Permalink
Subramaniam yeah that is absolutely true. Its the fall of US and its not the rise of India. If the same gains is against Euro & Pounds, we can undrestand.
I don't know why media is making a huge cry over a minimal appreciation of rupee. Its a fact that more dollars are comming to india and rupee demand is rising.
Why should govt devalue the rupee which causes inflation so 40% indians will starve (media is not bothering about their life, instead much bothered about the loss to Premji,Ratan Tata and Narayan Murthy).
Think what will happen if govt devalue rupee and make 1 dollar = 60 Rupees. The salary expectation of people will increase... Which will lead to higher salary among middle class and above. They only will be able to survive in cities... Just an example in bangalore its difficult for a person with salary of 10000 Rs/Month to survive with family.
RE:Why cry this much for a rupee appreciation of 10%
by shivanand marihal on Jul 25, 2007 01:38 PM Permalink
Looks like you have not related any way with the US$, hence you feel lightly. The person who are working overseas and family back home in India, then you really feel the heat. In last six months time wrt to US$ Rs went 10% stronger, Hence your salary is lost by 10%. Now imagine if you are in this state what will be your reaction.
RE:Why cry this much for a rupee appreciation of 10%
by T D on Jul 30, 2007 02:45 AM Permalink
Look at it this way ... so far the govt was giving you a 11% bonus for sending $ to India. Now you are getting a more realistic exchange. (In fact, even in today's terms, you are getting a bonus.)
RE:Why cry this much for a rupee appreciation of 10%
by sam on Jul 25, 2007 11:21 AM Permalink
Its sad to see that most Indians are foolish by jingoistic about a strong home currency. The rupee is getting stronger not just due to the rosy picture painted about India but due to a concerted effort by the US to keep the dollar weak so that its exports can rise. This has helped US to bring its unemployment levels to all time record lows. The rupee strength is also due to currency arbitrageurs (ECB borrowers) who are borrowing in Japan & a few other countries at less than 1% & deploying those funds in our equity markets for double digit returns. They are also doubly benefited by the currency appreciation. Indians don%u2019t realize that due to rupee appreciation, exports become uncompetitive & exports will end up losing orders especially the manufacturing sectors unlike the IT sector which can shift some of its developing work overseas. When the industries in the export sector close down there will be a huge loss of jobs & the task of regaining the lost export orders is difficult. Once these corporates which rely on exports start making lower profits especially the one%u2019s in the Sensex & A group stocks, the whole India story would evaporate. The rupee rise is mainly due to a few rich industrialists who are making money by borrowing huge funds abroad through ECBs & playing in the Indian stock markets at the cost of the foolish common man who is taken for a ride by the India story spun by these rich industrialists with the help of the media.
RE:RE:Why cry this much for a rupee appreciation of 10%
by Ranjith M on Jul 25, 2007 11:29 AM Permalink
So what is tthe solution ?.. We have only two options either market decide the value of ruppe or Govt interfere and devalue it..
Both have its own problems.. If govt devalue it it will cause inflation to rise.. its will not be good for a country with huge population of poor.
RE:Why cry this much for a rupee appreciation of 10%
by Lawrence Sebastian on Jul 25, 2007 02:48 PM Permalink
Good insight into the issue. Offcourse, the US has strategically poised their currency to all economies that are linked to dollars. In this way, their exports are boosted and the nation's exports taking severe blow. India must look towards finding new markets and make efforts to reduce the dollar dependency to Euros or other stronger currencies their by reducing the single currency trade risks. Excellant reviews are presented in this discussion. It would remain just good reviews unless the Indian govt. takes strong, proactive strategies(just like the US) and stablize to a win-win situation not only for the grossly effected NRIs and BPO sectors but for the whole economy as well.
It is a well known fact that rising of rupee is an indication of growth of our economy. We should also see the fact that the growth of economy is mostly driven by service sector which is mainly export oriented. The negative effect on this sector may cause the pace of economy growth to slow down. As the rupee is rising more wrt dollar only than other curriencies so it would be better not to expose our ecomony to a particular coutry only. It will increase our trade risk due to high exposure to single currency (As in case of Dollar). So, our service sector should try to find more markets for export which will help them to improve their profit. It will also reduce their fluctuation in profit (will reduce risk). It will also reduce their cyclic nature of business (perhaps). So, not to be frightened by the rising rupee, but to work hard for finding new markets not only depend on USA. In this way our service sector will be able to cope with this single currency risk, will also help in reducing the power of buyer, can increase ecomony of scale and will generate more employment opportunities. Although giving suggestions is the most easiest part of the story and implementing them is the most difficult..........these are just my views and possibly would be implementable, the only hard thing to do is finding the new markets other thing will come by own. if we will be able to do that than rising Rs vs dollar will be a synergatic effect for growth of economy, as import cost will be low....
RE:RE:In Rupee rising scenario
by Swaminathan R on Jul 25, 2007 11:56 AM Permalink
Mr Vikram, rising rupee against dollar doesn't indicate growth of our economy. Why UK pound which used to be ~60 INR , now it is 82.. euro was 40 when it launch now it is more than 50.. US wants to keep their economy going, so keep the inflation they lower the value so that they get more money.
RE:only expoters are un happy
by sam on Jul 25, 2007 11:17 AM Permalink
The only people who are happy are the speculators & trader like you.The rupee strength is due to currency arbitrageurs (ECB borrowers) who are borrowing in Japan & a few other countries at less than 1% & deploying those funds in our equity markets for double digit returns. They are also doubly benefited by the currency appreciation.
RE:only expoters are un happy
by Vijay Shankar on Jul 25, 2007 11:36 AM Permalink
I am an NRI.. been away for more than 10 yrs..& I now I have stopped sending money... reason.. lousy exchange rates la !
I don't know why media is making a huge cry over a minimal appreciation of rupee. Its a fact that more dollars are comming to india to India and rupee will appretiate.
Why should govt devalue the rupee which causes inflation so 40% indians will starve (media is not bothering about their life instead is much bothered about the loss to Premji,Ratan Tata and Narayan Murthy).
Think what will happen if govt devalue rupee and make 1 dollar = 60 Rupees. The salary expectation of people will increase... Which will lead to higher salary among upper middle class and above. They only will be able to survive in cities... Just an example in bangaloe its difficult for a person with a salary of 10000 rupees per month to survive with family.
RE:Why Cry thismuch for rupee appreciation of 10%
by poonam dil on Jul 25, 2007 11:26 AM Permalink
We have lived in Bangalore for 35 years. Now its impossible to manage. We are thinking of moving out of the City which we dont recognise and identify with anymore. Maybe the rupee rise is great for families like ours.
RE:Why Cry thismuch for rupee appreciation of 10%
by Vijay Shankar on Jul 25, 2007 11:41 AM Permalink
People have to find out how they can earn more money. Having said that, moving out to a quietr place is a very good option.. than to bustle around the heart & mindless white collered criminals.
Hi, Our country is mainly an importing nation,especially, petroleum products, chemicals,electronic goods,machineries etc. So, the rise in rupee value will help us to pay less amount.
