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  1. #1
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    Dec 2009


    Default Rupee set for a weak phase

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    The rupee is likely to weaken further on a host of issues which would plague the economy in the coming days as the 2014 election year approaches, according to market players.

    The rupee declined by 21 per cent from 44.5 a dollar in August to 54 in December 2011. Even though it recovered to 52 to a dollar level in January-March 2012, it again slipped to 53 level in April.

    “The future sentiment of rupee looks negative until some genuine efforts come from the government to bring in large capital inflows,” said K. N. Dey, Director, Basix Forex. There is likely to be considerable capital outflow by means of external commercial borrowing (ECB) repayment and foreign currency convertible bond (FCCB) redemption between June and August. “This will add more pressure to the rupee in the coming months until and unless India sees some fresh capital inflows to equate this outflow,” Mr. Dey added.

    The rupee closed at a four-month low of 52.96/97 a dollar on Wednesday, after touching an intra-day low of 53.02, as compared to its Monday's close of 52.73/74.
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