INR -- Indian Rupee

Rupee below 40 after a month - 28 Mar 2008

After Feb 28th, the rupee broke 40 and stayed above 40 for more than a month.

Forex reserves dropped to $304.66 billion (less by $1.8 billion) as RBI sold dollars.
The inflation is at 6.88% which is above 5% RBI’s comfort level. There is a good chance that RBI might increase the interest rates or raise the Cash Reserve Ratio.

FDI and FII investments will flow into india as the March 31st Year end is coming up.

Indian Currency INR - Rupee touched 6 month low 40.80.
EUR/USD touched high of 1.5901
USD/JPY touched high of 95.70
Gold touched $1033
Oil $122

Why does Dollar rise against Indian Currency INR -Rupee when the Dollar Slides across other currencies?

- USD/INR exchange rate is affected by the Capital Inflows / Foreign Investments. Capital flows are affected by the performance of Stock market.

- India runs a current account deficit and imports nearly 70 per cent of its crude oil.

- Outflows of Foreign Capital can put a pressure on USD/INR

Other News :-
- JP Morgan Chase (JPM) agrees to buy Bear Stearns(BSC) at $2 per share.
Bear Stearns was trading around 30$ on Friday (52wk Range: 26.85 - 159.36)

US Federal Reserve cut its primary discount rate by 25 basis points to 3.25%.
Fed

USD/INR Rupee @ 40.53

- Rupee closed lowest level in 6 months
- Rupee was down by 100paise since January 1
- India’s reserve is at $301.2 billion. The rise in the reserve is because of the revaluation of the non-dollar currency reserves. India stands fourth largest holder of foreign exchange reserves overtaking Taiwan and South Korea.

Overseas investors sold $3.4 billion in Indian Equities so far this year. Equity market is the key driver of attracting overseas investment.

INR crossed above 200 Day moving average and closed at 40.10.

Rupee opened at 39.78 and closed at 40.10 dropping 29 paise.
USD/INR dropped to 5 month low to touch 40.23

Reasons for the drop are attributed to the Shortage of dollars.
- Oil has hit record high of 100$ again and the oil importers are buying dollars to cover their import requirements.
- Poor capital inflows
- Stock market Sensex is trading without any clear direction.

RBI Bulletin - Trade and Balance of Payments

RBI Bulletin current statistics is released every month. This monthly report contains Trade and Balance of Payments information which is used as part of the Fundamental Analysis of USD/INR Foreign Exchange Rate (Forex)

To get the report click the link - http://rbi.org.in/scripts/BS_ViewBulletin.aspx

RBI Bulletin - Trade and Balance of Payments has the following subsections

- Foreign Trade (Annual and Monthly)
- India’s Overall Balance of Payments in Rupees
- India’s Overall Balance of Payments in Dollars
- Foreign Exchange Reserves
- NRI Deposits - Outstandings and Inflows(+) / Outflows(-)
- Foreign Investment Inflows
- Sale / Purchase of US Dollar by Reserve Bank of India
- Turnover in Foreign Exchange Market
- Indices of Real Effective Exchange Rate (REER) and Nominal Effective Exchange Rate (NEER) of the Indian Rupee