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Charts & Analysis

And The Dollar Hits 65 Rupees.

It sliced through 65 like a hot knife through butter. The last data point is intraday, the earlier are RBI reference rates.

Dollar Long Term Chart

While this looks like an extreme (distance from 200DMA as a %) it is still too early to call a top for the dollar. You call tops when stuff stops rising. Right now we’re going up a rupee a day.

Will the dollar touch 100? I’m not predicting. I’m reacting. I am slowly starting to pick up textile and IT exporters, but even there, the exit of investors might cause a sudden down move.

  • Vidyanshu says:

    Marc Faber makes an interesting point. He says that the next step in India saga is a sovereign downgrade. Which will reduce Indian Bonds to junk status and would mean FII’s cannot hold Indian bonds in their portfolios or in other words an exit of about $100 billion from the Indian bond market. If Rupee is in free fall now with exits of $7-8 billion, wait till $100 billion exits happen!! Also the point about the twist that RBI should allow bond yields to fall so that they become more attractive else, why would people be interested in investing in Indian bonds if RBI holds the yields down…and also what are they trying to do? increase liquidity or decrease liquidity?

  • mangoman says:

    BI allowed banks not to make provisions for restructured loans for infrastructure loans. This along with tweaking in the bond loss accounting saved more than 1 Lakh crore loss in Indian banking industry this quarter alone
    Apparently this is done to show(prop) up the bank balance sheets.
    Shame on you guys. Why not removing the prudential accounting norms altogether?
    RBI and government are not only cheating the public. The also cheat themselves.
    What do you think Deepak?