INR may not stop @54...
Since I wrote this a few things have changed....
- Gold imports into India have collapsed by 40-50% in volume terms.....
- FIIs have poured in large quantum of dollars into Indian equities.....
But
- Crude oil prices are still hovering around 110-115$....
- Exports have suffered...so trade deficit has not declined materially...
So whats the result all put together...??..
We have USD-INR trading at around 55.72 right now....
Continuing my play with the double edged sword...I suggest that USD-INR in the 60-65 range might be reality sooner than later.....I am no expert but this could happen within the next one year....
(Standard Disclaimer : The probability of my opinions going horribly wrong is closer to 1 than to zero!!)
3 comments:
If there is underlying strength in US Dollar then IT and other export oriented companies could do well. The disclaimer is modest rather than true.
Disclaimers are like insurance policies......in insurance higher the premium today...lesser the pain later....the more modest the disclaimer...the lesser brickbats later...in both cases...only TIME decides the eventuality...
What happens if the Ponzi scheme of printing money to keep borrowing finally loses utility...and cost of money starts to go up in US/EU??...
The question could decide fate of rupee??
If they start going up,carry trade will most likely suffer...and int rate spreads will go down...
this could mean lower inflows...and further pressure on the rupee...
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