Brtisih Bank Stanchart presumes Indian Rupee may breach 39/dollar mark
Kudos: Udaya Kumar a Designer of Indian Rupee 'ra'
100 Billion Dollar Bank Note !
Indian Black Money in Swiss Bank: Myth and Reality
The value of Indian currency against the US Dollar is gaining strength and it could break the Rs 39 per dollar mark in near future. The British Bank, Standard & Chartered Bank, said in a note issued on Tuesday that despite the continuous steps of interference taken by the Reserve Bank of India to restrain the rising value of rupee, the value of Indian currency may breah the 39-dollar mark.
It said:
Clearly, the immediate bias is for further gains and USD-INR (dollar-rupee) could well break through 39.0. The latest session of the rupee's strength has been fuelled by the development of risk taking trends in financial market.Given our forecast that the Federal Reserve would reduce rates again in October, the risk appetite may stay high for a longer period. The Federal Reserve cut key U.S. rates by a half-percentage point on Sept. 18.
It further said that the value of Indian rupee has gone up by more than 12.5% against the US dollar in 2007. The increase in currency value has made the Indian rupees the best performing currency among Asian countries. The major inflow of Foreign Direct Investments (FDIs) of about $16.7 billion into local shares has helped the Indian currency to go stronger against the US dollar.
Further, the Reserve bank of India has controlled the value of Indian rupee by applying a strong intervention in financial market. The RBI has bought $39.9 billion in the first eight months of 2007 including more than $11 billion in the months of February and July this year.
The British bank has estimated that the RBI has bought around $21 billion to $23 billion in the market since Sept.18 till now. However, the strong interference has been almost failed to stop the rising value of Indian currency against US dollar.
According to the British Bank estimates, in the longer term, the market would be remain confident on the INR because the Indian economy will be relatively shielded because of the slowing U.S. economy, strapping domestic demand and diversified export base.
The surplus in balance of payment is also supporting the Indian currency. The financial experts have estimated that the expected surplus in the fiscal year 2007/08would be about $42 billion against the initial estimate of around $25.6 billion.
Read
