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Where is rupee headed against dollar


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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.