Why INR is still sitting at Rs48 against USD

[mhayden]

USD had given up a lot of strength against EUR but INR is still at Rs 48 levels. Why is that happening? Is the Indian deficit is causing this to happen?


MH

 

[yasirdxb]

short usd/inr and short nifty and get paid:thumb:

 

[anniyan]

this was really informative ..any idea on whether INR will go up against USD for the next few weeks?

 

[natjay]

INR is gaining over a weak USD this week. The levels of 45-46 to the dollar looks stable for now.

 

[tovishal2001]

INR is trading below its true value. It should near 35 to 40.

Its policy of GoI to keep Rupee in lowest bands so exporters remain in profits. RIL is one of them ofcourse. Banks on behalf of RBI buys into dollars from time to time to control rise in Rupee.

Though, I am not supporter of this policy. It comes at cost of huge advantages of stronger Rupee.

Also, a lot of time has passed since 1980's and now its 2009. MMS should move out from its old-age views of India and take confident steps.

 

[tovishal2001]

"The rupee remains a structurally undervalued currency, and the ongoing pickup in capital inflows will increase the pressure for appreciation," said Rajeev Malik, economist at Macquarie Securities.

Also read this to get better view of RBI's Official policy on Rupee -

http://www.hindu.com/biz/2004/04/05/stories/2004040500361600.htm

 

[mhayden]

INR is trading below its true value. It should near 35 to 40.

Its policy of GoI to keep Rupee in lowest bands so exporters remain in profits. RIL is one of them ofcourse. Banks on behalf of RBI buys into dollars from time to time to control rise in Rupee.

Though, I am not supporter of this policy. It comes at cost of huge advantages of stronger Rupee.

Also, a lot of time has passed since 1980's and now its 2009. MMS should move out from its old-age views of India and take confident steps.

If stronger currency gives you a lot of advantage why China hasn't been letting the RMB to appreciate for nearly 2 decades?

Do you have any idea what INR at 35 will do to India? Every exporters, including software services will shut the industries forever. Even the exports like rice, grains and other products will be out of business. If India puts farmers out of business, then India have to import every products from abroad for a long time. Importing a lot will put INR deep deep trouble forever.

Less valued rupee gives a lot of advantage for exports. We need to learn it from china.

What I meant in my original post was, why INR not at all moving against USD when USD has been volatile for a while. I never wanted to have stronger rupee.

 

[mhayden]

INR is trading below its true value. It should near 35 to 40.

Its policy of GoI to keep Rupee in lowest bands so exporters remain in profits. RIL is one of them ofcourse. Banks on behalf of RBI buys into dollars from time to time to control rise in Rupee.

Though, I am not supporter of this policy. It comes at cost of huge advantages of stronger Rupee.

Also, a lot of time has passed since 1980's and now its 2009. MMS should move out from its old-age views of India and take confident steps.

One more thing, the INR strength is mainly based on inflows of Capital injection. Nothing else. Once the capital inflow recedes the Rupee will fall from current levels.

FYI, INR is not fully convertible currency yet. So you can't tell the real value of INR unless it becomes fully convertible and that too it needs to be fully convertible for long enough to take a call on that. If INR becomes fully convertible, there will be a lot of volatility in the movement. It's range will be broader.