A weak rupee, though seemingly good for exporters, would push up input cost further for Indian companies.
The combined wealth of India's dollar billionaires is now equivalent to 33.81 per cent of India's nominal GDP.
Falling for the fourth day in succession, the rupee today dipped by 23 paise to close at nearly three-week low of 59.38 against the dollar amidst the RBI announcing an SLR cut that is expected to release nearly Rs 40,000 crore into markets.
The depreciation in the yuan has led to a decline in all emerging market currencies
The rupee depreciated further by 7 paise to 65.12.
Double whammy for consumer firms, where the top line will remain subdued due to demonetisation and margins will squeeze owing to a crude oil spike and rupee depreciation, reports Viveat Susan Pinto/Business Standard from Mumbai.
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The rupee gained 8 paise to close at over two-week high of 61.23 against the US dollar in the previous session.
India's rupee is likely to remain under pressure due to high prices of crude oil and other commodities, and may stabilise at around 79-80 against the US dollar in the near term, say experts amid limited headroom available with the Reserve Bank to check the weakening of the domestic currency. The currency has slumped over 5 per cent this year after Russia's invasion of Ukraine sent international crude oil prices soaring to a decade high. On Monday, rupee ended at a fresh all-time low of 78.34 (provisional) against the US dollar.
The stronger than expected monsoon has not yet softened food inflation as much as it should have and in particular, vegetable prices have been impacted by weather-driven supply disruptions, said RBI Governor D Subbarao while unveiling the first quarter monetary policy review.
Rupee depreciation and a slowdown in capital inflows make it harder for business to service liability, while keeping pressure on the currency.
The report further pointed out that the current rupee volatility will be 'less damaging than in 1991, when low reserves and a widening current account deficit prompted India's last balance of payment crisis'.
As the Indian currency hovers around its lowest versus the US greenback, several smaller and mid-sized companies are expected to face rough weather as almost 44 per cent of the foreign loans taken by Indian companies remained unhedged. According to the data sourced from the Reserve Bank of India, Indian companies raised around $38.2 billion in the financial year ended in March. Of this, only 56 per cent of the loans are hedged while the rest of the foreign loans remain unhedged, thus risking the companies to forex volatility.
The December meeting of the Reserve Bank of India's (RBI's) six-member Monetary Policy Committee (MPC) will start on Wednesday even as there is no clarity on whether Governor Shaktikanta Das, the chair of the panel, will continue in office after his term ends next week. The outcome of the meeting will be announced on Friday by Das at 10 in the morning.
'Exposure to small and midcap stocks exceeded desired levels in many portfolios, prompting rebalancing.'
'Investors with foreign currency-denominated goals, such as foreign education or foreign travel, should go for US equity funds.'
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The BofAML report said that five year money can be raised by issuing the 7 to 9 per cent coupon bonds to stabilise markets, just as it was done in 1998 and 2001.
There was a massive 24% decline in India's gems and jewelry exports to $2,321 million for September 2018 as against $3,053.38 million in the same period last year.
The rupee has depreciated 10.5 per cent against the dollar this year, making it Asia's worst-performing currency.
The Indian rupee on Monday reacted downwards by 12 paise to log nearly one-week closing low of 63.41 against the Greenback.
Following are the highlights of the Economic Survey 2022-23 tabled in Parliament on Tuesday
The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent.
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It also painted a grim possibility of any major gains in the rupee during the current fiscal saying that the continuing global volatility, and domestic political uncertainty ahead of the 2014 hustings will limit chances of any significant appreciation apart from further impact growth.
Indian rupee is likely to test 76-76.50 levels as a relatively strong greenback, boiling crude prices and COVID headwinds deepen the depreciation bias for the domestic currency, according to experts. One of the significantly-hit Asian currency in recent months amid uncertain economic times, rupee is expected to see a consolidation in the vicinity of the current level before being pulled towards the depreciation bias. While the equity market has been surging with occasional blips, the rupee has mostly been weak against the US dollar in recent months.
Buoyed by regulatory overhaul and infrastructure boom, engineering conglomerate Larsen & Toubro (L&T) has identified realty business as one of its growth engines for the next 10 years and plans to acquire land parcels while expanding pre-sales, said a senior company executive. L&T Realty has started looking out to acquire land parcels and grab partnership development opportunities across markets to scale up its business. "We are making some strides in that direction, albeit cautiously.
Extending its losing streak for the fourth straight day, the rupee weakened by five paise to 61.01 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers.
In the currency markets, the rupee lost another 10 paise to close at 1-week low of 63.54 against the US dollar
Given the prevailing uncertainties, investors must maintain a 10-15 per cent allocation to gold in 2023.
If the REER is to be restored to its 2004-05 level, the rupee has to depreciate a lot, says V K
India's exports may have touched an all-time high of $422 billion in 2021-22 but recession in key western markets and geo-political crisis due to the Russia-Ukraine war are expected to impact the growth of the country's outbound shipments in 2023. All the global trade promoting factors like political stability, movement of goods, adequate availability of containers and shipping lines, demand, stable currency and smooth banking systems are in disarray. Adding to the woes, COVID cases have again started rising in countries like China, Japan, South Korea and the US.
India's forex reserves declined $5.24 billion to $617.23 billion for the week ending February 9, according to weekly data released by the Reserve Bank of India (RBI) on Friday. The forex kitty stood at $622.5 billion for the week ended February 2. However, in the current fiscal, the forex reserves have increased $50.28 billion, the RBI data showed.
Falling for the second day, the rupee on Friday weakened by 12 paise against dollar to end at 62.68 weighed down by demand for the American currency from importers and data showing fiscal deficit crossed 95 per cent of the annual target during April-December.
Indian rupee appreciated by 35 paise to end at two-week high of 63.03 against the greenback.
Rupee down 13 paise to 66.72 against dollar
With India's imports exceeding exports, weak rupee does more harm than good. Analysts, however, say that rupee depriciation is positive for export-oriented sectors such as IT services, pharmaceuticals, textiles and automobiles
Some leading Indian companies are likely to see their earnings declining if the Indian currency depreciates further, analysts and finance heads say.
Investors in international funds should have a horizon of more than five years. Not only will this help them overcome equity and currency volatility, it will also help them enjoy better tax treatment, says Sanjay Kumar Singh.
'It was because of the huge selloff in the Indian equities that the rupee fell so sharply against the dollar on Friday.'
RBI Governor Shaktikanta Das on Wednesday defended the Reserve Bank's handling of the price situation, saying acting prematurely on inflation would have exerted a heavy cost on the economy and citizens. Acknowledging that the inflation target has been missed, Das said the RBI decided to support the economy by not introducing a rate hike in face of a spike in inflation. "We prevented a 'complete collapse of the economy' by keeping rates lower and stayed away from premature tightening," Das said speaking at the annual FIBAC conference of bankers in Mumbai.
India's foreign exchange reserves increased $2.95 billion to $645.58 billion for the week ended March 29, the Reserve Bank of India (RBI) said on Friday. This is the sixth consecutive week of a jump in overall reserves. The kitty had increased $140 million to $642.63 billion in the previous reporting week.
India's forex reserves increased by $6.4 billion to $642.49 billion for the week ended March 15, the Reserve Bank said on Friday. In the previous reporting week, the overall reserves had risen by $10.47 billion to $636.09 billion. In October 2021, the country's forex kitty had reached an all-time high of $645 billion.
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