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Charts & Analysis

Rupee Nears 53 a Dollar

The Indian rupee has started sliding again, going up to nearly Rs. 53 a dollar (RBI Reference rate).

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This is the highest the dollar has been since 4 Jan, and it looks like we’ll go break the 2012 high (of Rs. 53.30) very soon.

Longer term, we are close to 11 year highs.

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This is bad for:

  • Importers. We import Gold, Palm oil, etc.
  • Oil, obviously. The oil pool deficit gets bigger and bigger. I’d expect some retail fuel price increase soon.
  • Borrowers of external loans. This is not going to be fun for those who borrowed in dollars, converted to rupees, and now have to return dollars.

Good for exporters, but you can bet that their customers will tell them to cut prices because of the rupee depreciation. Not fun either.

  • Nayak says:

    To what extent would you think Rs. Can fall? I have some amount to repatriate and waiting for right time. Is this good time or can I wait? Are there any triggers in near future to change this trend?

  • Ramanand says:

    I’ve heard this logic before for exporters…exporters benefit from the weaker rupee only in the short term and clients bargain for better rates soon after.
    However, why doesn’t the same argument apply to importers? Why can’t importers say, ‘hey the dollar has gotten strong…reduce your dollar rates, or else…’?

    • Hey even the exporters find it difficult to say, look, the rupee has gone up, give us more dollars. It’s about who has better bargaining power, and currently India imports stuff it really wants and exports stuff that people can get elsewhere (lower end of hte product/service bargain). I’m talking as a whole, but obviously there are pockets of excellence where customers will pay anything.

  • IsItPossible says:

    At some point in near future rupee would trade close to Rs.60+
    WHY?
    – Euro crisis is not going anywhere soon and eventually will cause another financial shock across the globe
    – This could also trigger housing bubble burst causing max. pain
    – A DEEP recession which India haven’t seen for decades
    To add to all above:
    – corruption levels are ONLY increasing
    – government not doing enough to sustain economic growth or atleast not making things easier

  • jigar says:

    this is most apply in real estate
    in my city 20 lac duplex,, in diwali 2009 rupee 45=1$ = 45k $
    today same 30 lac duplex,, in diwali 2011 rupee 54= 1$=55k $
    rise just 20 % in $ terms and 50 % in rupee terms in 24 months only,,

  • Kshitij says:

    Keep watching the macro nos and rupee.
    We have anything but a bright future.
    Our politicians will cover up for any sunshine that we may ever get.
    Be ready to be part of Somalia (at worst).