Guys the question is rupee really rising? In global market it is the dollar which is weakning. If rupee was rising it shld have gained against other currencies like Euro.
RE:Is rupee rising or dollar depreciating?
by Vinit Sankhe on Jul 25, 2007 09:42 PM Permalink
But prashant isnt that already happening. Consider 1 great Briton pound ?. It was Rs. 82 6 months back. Now its Rs. 78.5.
RE:Is rupee rising or dollar depreciating?
by Natarajan Vijay on Jul 25, 2007 09:25 PM Permalink
Prashant : What is happening is that India's terms of trade with respect to the US is improving i.e. we get more goods/services/assets from the US than we give them. The US dollar is not necessarily weakening. There is plenty of capital inflow into the US, the interest rates in the US is pretty low and inflation is very low and US productivity is moderately increasing. What is happening is the the RBI is undervalueing the rupee by paying more than the market rate. It used to undervalue even more at Re45=$1. But it is now undervalueing it less at Re40=$1. I would arge that they should just let it float. The fact that the Re is strengthening is in effect a vote of confidence from the rest of the world to India that they think that the INdian economy will grow and that the Indian govt. will control inflation of the Re. It is a good development in general!
RE:Is rupee rising or dollar depreciating?
by sudhanshu singh on Jul 25, 2007 10:01 PM Permalink
You r right prasant, dollar is weaking against all curriencies. Here in Phillippines, two years back one dollars can fetch you 56 peso but now only 45 peso. The only solution is to look for the other countries to do business but unfortunately for Indians the USA is synonemous to the whole world. And if we avoid diversing our business in to other areas, we will pay the price. Another major attack by Al queda or muslim terrorists in USA like 9/11 and you will see dollars coming down to 30 rupees. What will we do then? So let the exporter make all hue and cry,but donot pay much heed to their demand for subsidies. They are in business and of course have a good calibre. They will ultimately find many ways reduce their dependence on US dollars. Other wise it will be like millions of rupees going to fertilizer subsidy for private companies using Neptha based technology while they can change easily to gas based low cost production technology. But when they are getting huge subsidy from govt in the name of farmer why will they change?
