Where is rupee headed against dollar

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  • The term greenback refers to paper currency that was issued by the United States during the American Civil War.[1] There are at least two types of notes that were called greenback:United States NoteDemand NoteFIIs have not sold shares aggressively despite the weakness in both the rupee as well as equities. But should the rupee slide further for whatever reason, it could trigger a vicious circle wherein FIIs would start pulling out money from shares, which in turn would weaken the rupee, and in turn spark more selling from other foreign investors.Specifically to India, foreign institutional investors are in no hurry to invest in our equity market due to a combination of domestic and global concerns.
  • Where is rupee headed against dollar

    1. 1. Where is Rupee Headed against Dollar? Presented BY: Anu Mishra
    2. 2. An overview of Rupee in 2011
    3. 3. Fact of The Previous Year 2011The year 2011 has been one of the worst years for the Indian rupee.The rupee has virtually crashed, posting the biggest annual loss since 2008.This is a huge loss in the rupee value — close to 16 per cent drop against the dollar.
    4. 4. Reasons for Rupee Low The strong demand for the dollar globally (because of the turmoil in the euro zone), The greenback is expected to climb further with most other currencies. Domestic factors like high inflation and rising crude price would put further pressure on the rupee. “Capital inflow is a major bottleneck here ,” By: Roy Paul ,DGM , Federal Bank.
    5. 5. Reasons for Rupee Low FIIs pulling out or not putting new money into the market and because some of the oil payments that India had to give out in the last several weeks. The rupee would end up potentially depreciating more than others currency. The rupee is low due to feeble trade deficit numbers and weak global sentiment.
    6. 6. An Opportunity when Rupee LowMost of the trading funds to bring money into India and gain on two counts;1. One on rupee appreciation in subsequent period and2. The stock price appreciation as well.
    7. 7. Why High Demand for Dollars?• Regulator has only a reserve of around USD 320 billion to meet countrys import requirements for 6-8 months.• FCCB repayments, due in 2012. Kotak Institutional Equities,$5.6bn.
    8. 8. Conclusion:• The fundamentals and market dynamics continue to remain bearish.• There is severe pressure on:Trade/current account;Flows into debt capital market is down and not expected to revive soon;FII flows into equity capital market will be down not ruling out reverse flow ahead of their financial year end.

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