RBI takes the first step to check inflation

RBI takes the first step to check inflation


As I wrote in my post yesterday that the country is eyeing on RBI, yesterday RBI took concrete steps and interfered in the inter-bank currency market in the last trading session.


Rupee got strengthened by 64 paise and the last closing was noted around Rs. 52.70 per USD.


RBI is certainly going to interfere in this matter further as a developing economy like ours can NOT afford to have such a inflation rate. Ideal value of Rs/USD needs to be something around 42-45 INR per USD.
Anything less or more than that is not benificial as per the figures of balance of payments and trade deficits of the country.


Stay Tuned
More to come at this space

Indian Rupee approaching towards ‘historical lows’

Indian Rupee approaching towards ‘historical lows’

On the account of the withdrawal of investments due to the annual closing by the foreign institutional investors and the strengthening of USD against the Euro, the Indian National Rupee touched a historical lowest benchmark of Rs. 53.80 in the last trading session. This is the 5^th consecutive downfall of the INR.

What were the reasons behind it?

USD became stronger against major international currencies.

Due to hypes that “Euro Problems” are going to rise again, the Euro touched a two months lowest circuit in the currency markets.

The member nations of Euro zones are trying to reduce their credit exposure which has resulted in a liquidity crunch.

Indian Industrial Production figures have not been satisfying.

Now what would happen? Every one is eyeing on RBI

Now the nation is looking forward towards the Reserve Bank of India. To sustain the prices of Indian Rupee, the RBI had sold USD to the tunes of 84.5 & 94.3 crores INR Sept. and Oct. 2011 respectively and didn’t purchase a single USD. 
Today on Friday the RBI is supposed to analyze the monetary policy. Till now the Reserve Bank has NOT interfered in the money markets. But has given few signals to do the same soon.

Now its a wait and watch game