Unresolved succession plans and informal ownership structures are fuelling bitter family fights across India's corporate boardrooms.
While the bond market is relatively conservative about their interest rate expectations, the currency market seems to be projecting that interest rates should be much sharper
The sudden movement of the rupee - post the monetary policy - is not a reason to panic, said currency dealers. According to them, a correction was overdue for the rupee that remained the best performing currency in the region for well over a month. The rupee closed at 74.72 a dollar on Friday from its previous close of 74.60. It had dropped 1.52 per cent against the dollar on April 7 after the Reserve Bank of India (RBI) announced its monetary policy, committing to buy Rs 1 trillion of bonds in the June quarter. A weak rupee goes well with the export narrative of the government, and is consistent with the RBI's intervention strategy that prevented an appreciation.
Forex dealers said besides the dollar's gain against other currencies, fresh demand for the American unit from importers and a weak opening in the domestic equity market put pressure on the rupee.
Month-end dollar demand from oil companies mainly affected the rupee value against the US currency, a forex dealer said.
In the global markets, the euro was under pressure against the US dollar yesterday, dragged lower as European monetary policy officials indicated willingness towards supporting more stimulus measures to aid the regional economy.
Foreign fund flows into and out of the domestic sharemarket will continue to be key for the rupee's fortunes.
Forex dealers said increased selling of the American currency by exporters and banks supported the rupee but a lower opening of the domestic equity market and dollar's rise against other currencies overseas restricted the gains.
The domestic currency had lost 49 paise to close at a three-month low of 60.55 on Thursday on capital outflows after the US Fed trimmed its monthly bond buying programme by another $10 billion.
Foreign investors have bought nearly $5 billion worth of debt so far in 2014.
The rupee had gained 10 paise to close at 60.11 against the dollar in Tuesday's trade on fag-end selling of the US currency by banks and exporters.
Forex dealers said strengthening of dollar against other currencies in the global market also put pressure on the rupee but a higher opening of the domestic equity market limited the fall.
The rupee will largely remain stable but with a mild depreciating bias in the next one year
Global currency market sentiment is likely to be driven by the US deficit and debt ceiling negotiations, with markets likely to turn more risk averse closer to October 17, the date by which the US Congress must approve raising the country's borrowing limit.
Going by the real effective exchange rate, the rupee is overvalued
Rupee, bonds may see knee-jerk reaction, as Urjit Patel is considered an inflation warrior
The world is full of family businesses that withered away with the passing of generations, creating much bitterness and ill will. Entire clans that used to be household names have become pale shadows of their once-mighty empires.
The reason for the stickiness in bond yields can be many, but the most responsible is the liquidity deficit stance taken by RBI, says Anup Roy.
'Overall, the Indian economy is doing well.' 'Our economic fundamentals are strong and the early signs of recovery are sustainable.' 'This is positive for the market in the long run.'
RBI is unlikely to stem the slide against the dollar as the greenback is rising rapidly against all currencies in the world.
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