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Old 27th August 2013, 21:10   #106
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Default Re: The Falling Indian Rupee

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Originally Posted by amitoj View Post

Hedge fund managers "shorting India" also tells that there is hardly any investor confidence left in the market.
lol after reading you comments, headed to first post. voila it was top news with everything in RED letter

http://www.firstpost.com/blogs/rupee...s-1063597.html

At times I wonder what our Politicians are made of. Every body's confidence is low except for these few rock solid brainless fellas. Just to Prove it , Our FM issues Below statement , completely unaware of Fact is that he himself the one who is responsible for this. Kudos to him for acknowledging at least what the problem is . I thought he too will choose to remain "silent" , thus maintaining his "integrity".

http://www.firstpost.com/economy/sta...m-1064483.html

Between Rupee registered it;s biggest fall in single day post 1995.
http://www.firstpost.com/business/ru...s-1064575.html

Last edited by .sushilkumar : 27th August 2013 at 21:15.
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Old 27th August 2013, 23:57   #107
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To me FSB seems more like a long term strategy rather than short term for 2014. Congress by now have probably realized that they can't form the next government with them being the largest party. They want to mess up the economy so badly that the next government can't possibly recover. UPA will be back in 2018-19 (or even earlier). They will ride on the desperate reforms done by government previous to them and rule the nation for next 2-3 terms. If you see the history of India, best phase was from 1991 to 2004. This is when Gandhi family was not in the picture of Indian politics.

Only hope is en masse voting by supposedly more literate middle class. If UPA continues the way it is going, there will be no middle class in few years, only rich and poor.
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Old 28th August 2013, 06:57   #108
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Originally Posted by Santoshbhat View Post
Weak Rupee makes it easier for NRI's to buy property in India. I know the prices of premium appartments in Bangalore had gone up sharply when Dollar jumped from INR 50 to INR 55. Now with Rupee hitting 65 to the Dollar, property prices have just fallen by another 20%, if you look at from the NRI's point of view.
NRIs are better off keeping their savings in dollars. There's no end in sight for this mess and looming federal election makes the situation more volatile.


Quote:
Originally Posted by .sushilkumar View Post
Just to Prove it , Our FM issues Below statement , completely unaware of Fact is that he himself the one who is responsible for this. Kudos to him for acknowledging at least what the problem is . I thought he too will choose to remain "silent" , thus maintaining his "integrity".
That has been their media strategy for past few years. They will all glorify the problem forgetting the fact that its their 9 year misrule which is the root cause.
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Old 28th August 2013, 09:32   #109
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Good Morning Team, This is a clipping in Mint Newspaper Mumbai on 27 Aug 13 regarding impact of weak rupee on Auto OEMs. Sorry for posting late as i returned late to delhi yesterday night.

AD
Attached Files
File Type: doc Mint Newspaper 27 Aug 13 Mumbai.doc (1.34 MB, 157 views)
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Old 28th August 2013, 10:01   #110
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Waiting for the Rs.100 per US$ level!

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Originally Posted by carboy View Post
I googled a lot, but what is FSA?
Food Security Act !! What is now in the Rajya Sabha.

Last edited by Eddy : 28th August 2013 at 10:16. Reason: Merged
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Old 28th August 2013, 10:35   #111
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As an importer, I fondly recall the times when the Dollar was at Rs. 52 and the Euro was at 70! Now it is 68 and 90 and climbing!!
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Old 28th August 2013, 10:38   #112
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Originally Posted by Gandhi View Post
Congress by now have probably realized that they can't form the next government with them being the largest party.
I think the Food Security Bill is going to get them back in power. Problem is no one in this country looks at the implementation of any act's or laws. Going by history, the implementation of the FSB is going to fail miserably but that's never been a reason for the failure of any government. Congress is going to milk this act to their benefit and what's going to help them more is that it's the pet project of Sonia Gandhi and the Congress is going to hail her as another Mother Teresa for this bill! Quoting from an article below:

Quote:
the party has decided to project it as the result of Congress president Sonia Gandhi’s vision to give food security to the poor and marginalised, despite hurdles created by Prime Minister Dr Manmohan Singh and Agriculture Minister Sharad Pawar.
Congress is going to attack their own PM to project Sonia as some sort of Maa!

Quote:
Congress spokesman Bhakta Charan Das thanked Sonia Gandhi for the bill and in an emotional briefing hailed her as a messiah of the poor
The Gandhi's are going to be called messiah's of the poor and ride their way back to 10 Janpath to ruin this country for another 5 years.

Full article here.

If this country and it's citizens were mature they would ask Congress why after ruling this country for 60 years, still 67% of it's citizens are poor requiring an act like this.

The Congress & the Gandhi's don't care how well the FSB is going to be implemented. For them the FSB ends with it coming into force giving them votes and another 5 years to rule this country. Of course, by 2019 Vadra would have made 1.26 lakh crores which is equal to the FSB amount but that's another story.

Last edited by amit : 28th August 2013 at 10:40.
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Old 28th August 2013, 11:00   #113
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I got this from my brother who works at RBI. The reasons why the rupee is falling.
Cannot decipher a few things here, but maybe can ask him further details:-

1. Widening current account deficit: This is resulting in creating more actual as well as speculative demand for the dollar and other convertible currencies.
2. Policy inaction: Perception of lack of clarity on the policy front is also fanning speculative demand wherein the Reserve Bank of India (RBI) on one day said it will tighten liquidity and on yet another said it will inject $1 billion in the market.
3. Low forex reserves: India's foreign exchange reserves are enough to cover imports of only seven months. The forex reserves have declined in the recent months. Due to low reserves, the RBI can't intervene aggressively in the currency markets.

4. Growth slowdown: India's gross domestic product (GDP) growth fell to a decade low of 5 per cent in 2012-13. The situation is unlikely to improve much this year. Foreign investors are pulling money out of the Indian markets due to slow growth.

5. Dependence on foreign money: India's current account deficit was financed by foreign money for the last many years. Withdrawal of money by overseas investors is leading to the weakness in the rupee.

6. Recovery in the US: The slow but steady recovery in the US is making the greenback stronger against other currencies.

7. Stimulus withdrawal: Indications that the US may withdraw or ease the fiscal stimulus package could potentially put the brakes on funds for developing economies.

8. Capital controls: The decision by the Reserve Bank and the government to impose temporary restrictions on capital flows has not gone down well with the markets, as it will not only discourage Indian companies from investing abroad, but also foreign firms from pumping money into India.

9. Trends in other markets: The rupee is also following the trend seen in the currencies of other emerging economies such as Brazil, Indonesia, Russia and South Africa.

10. Speculative trading: Speculative trading in the currency markets is putting further pressure on the Indian rupee
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Old 28th August 2013, 12:55   #114
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Now that the rupee rate vis a vis the dollar will cross/ has crossed our average life expectancy, it should retire honorably

The FSA is only going to make things worse. I have a question here. What if there is a new government and they decide to cancel/ roll back the FSA? Is that feasible/ possible legally? I would presume yes, if they had a majority in the house.

I am not sure if it is logical, but then most of the speakers/ ministers do not seem to be logical either in what they say.
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Old 28th August 2013, 12:58   #115
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Quote:
Originally Posted by phamilyman
I am not justifying them but there are a multitude of hidden costs like relocation costs for all the facilities (all the sewers / wires piping under the current road), setup of aworkshop etc etc. I wish life was so simple.

Here is an example of a really costly infrastructure! METRO!

The airport metro costed 243cr/km. DMRC is 156 cr/km (but alot of it is 10+ years old).

Two things:
a. Where did you get cost of production in India at $35/barrel? Even the cost of exploration (forget actual development) for a few like ONGC is $26/barrel. http://ibnlive.in.com/news/ongcs-pro.../286235-7.html Some may be cheaper but you forget that the NELP mechanism allows market pricing for oil. If there was no market pricing, the production would have been lower.
b. ONGC gives back most of it in upstream subsidy sharing and their net realization is always around $50/barrel of oil . So there are no "windfall" gains for ONGC atleast.

This picture of procurement is plain wrong.
a. Discount: No one agrees to a 30% discount as you seem to be implying. Why would they?
b. Tenure: The contracts are with a short time window and are essentially a set of single digit cargoes being delivered. Here are a few sample links:
http://www.bharatpetroleum.com/YourC...sid=P000036195 - 4 cargoes in a 15 day window, with 13 day advance notice.
http://profit.ndtv.com/news/corporat...sources-302374 - one cargo, with 15 day notice.
http://newindianexpress.com/business...icle225483.ece - again a couple of weeks' notice.

Please do share a single six month tender link that was concluded 30% below market price.
So you are comparing cost of creating railway line with a flyover ? Rail line has many additional expense which includes procuring property and creating stations and laying down the signals . An flyover on existing road does not have any of theses but still more expensive .Can you really justify and compare these ?

I am sure that you can even find tenders of common wealth games even higher than these figures . But can you really believe them ?

Regarding the costs and health of oil PSU , I have ready told you about my source (some one who was part of managing one of these company ) let me check if he can provide any links .
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Old 28th August 2013, 13:11   #116
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Front page article in TOI today mentions the Finance Minister has a 10-point plan to revive the economy, top of the pile being easing of judicial restraints on mining and green clearances.

The mining lobby must be rubbing its hands in glee, they're about to get a virtual free license to do what they please, all over again.
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Old 28th August 2013, 13:15   #117
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Saw the rupee touch 68.80 today. Not good for any Indian.

I read an article and couldn't understand the following lines told by Sara Yates a strategist in JP Morgan

"the more the currency depreciates, the greater the chance that foreign holders of the equity holders capitulate in their position. However the greater the outflow of foreign funds, the smaller the capital account surplus, the harder the current account is to finance and the more pressure falls on the currency, creating a vicious spiral of financing concerns".

Could experts please explain it to me. I don't understand much of the complicated words please keep it simple an eg would be great too
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Old 28th August 2013, 13:20   #118
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Hear that diesel is to be hiked by Rs.5? The crude oil rate has gone up. More trouble to come?
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Old 28th August 2013, 13:30   #119
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Quote:
Originally Posted by Chetan_Rao View Post
Front page article in TOI today mentions the Finance Minister has a 10-point plan to revive the economy, top of the pile being easing of judicial restraints on mining and green clearances.

The mining lobby must be rubbing its hands in glee, they're about to get a virtual free license to do what they please, all over again.
Go Green or Eco-consciousness was an American theory to put brake on other countries. They first implemented it on South East Asia fishing industry(prawns) in the name of turtles getting killed in fishing nets- to protect their fishermen/fishing industry and advertise their new technology fishing nets.

Sorry but it is not conspiracy theory, but a fact. Our minister(JR) either plays fool or is fooled with that propaganda preventing every development in the name of earth!

If we were so eco-conscious we would never had dams, roads or even ports! Everything harms this world! Even we breath out CO2. After fixing industries will it be human beings labelled as green house gas producers?

Atleast lets allow some one to sell(export) some iron oar, bauxite and coal to bring back the rupee to a sane level!
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Old 28th August 2013, 13:35   #120
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Would this be an "okay" time to buy real estate in Bangalore/India for a domestic investor? Or should one wait - expecting real estate prices to soften along with the crash in the economy? I mean, everyone's talking about a crash, but the real estate prices are just continually zooming up, and up and up.
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