SME Times is powered by   
Search News
Just in:   • Adani Group to invest Rs 57,575 crore in Odisha  • 'Dollar Distancing' finally happening? Time for India to pitch Rupee as credible alternative: SBI Ecowrap  • 49% Indian startups now from tier 2, 3 cities: Jitendra Singh  • 'India ranks 3rd in global startup ecosystem & number of unicorns'  • LinkedIn lays off entire global events marketing team: Report 
Last updated: 23 Sep, 2022  

RBI.Border.Thmb.jpg RBI expended about $80bn or 15% of reserves moderating rupee fall

RBI.9.jpg
   Top Stories
» 49% Indian startups now from tier 2, 3 cities: Jitendra Singh
» 'India ranks 3rd in global startup ecosystem & number of unicorns'
» Tripura exported over 9K tonnes of pineapples in 2 years
» CPI inflation eases to 6.71% in July, IIP falls to 12.3%
» Rupee depreciates 12 paise to close at 79.64 against US dollar
IANS | 23 Sep, 2022
The Reserve Bank of India (RBI) now has little option but to let the rupee slide gently - the rupee is down 9.6 per cent YTD even as DXY has appreciated nearly 20 per cent, probably the fastest rise on record, Emkay Global Financial Services said in a report.

The RBI has expended around $80 billion -- about 15 per cent of reserves -- moderating the rupee fall and that was the apt policy choice then.

As RBI was selling down dollars, the excess liquidity (as reported at LAF window) normalised from a Rs 8 trillion surplus to a Rs 1 trillion deficit presently. This was in sync with its policy normalisation move as well.

Emkay estimates Central government's balances with RBI at about Rs 3.6 trillion which will eventually ease the deficit.

India's economic resilience and high frequency indicators are rock solid. Exports will weigh down on growth a bit later in the year. Indian markets should outperform but absolute out-performance is unlikely. A 5-7 per cent cut and time correction from the recent Nifty highs of 18,100 is more likely, the report said.

Near-term banks should under-perform as rupee and bond yields re-adjust. However, credit growth estimates will be revised upwards and hence not sure whether correction will be deep enough to trade, it added.

RBI's policy choices now will be more limited - any significant dollar sales will tighten liquidity (and interest rates) and start choking growth. Of course, RBI can supplement the liquidity by doing OMO (buying bonds) to replenish liquidity - this though can send confusing signals to market as policy rates are still being tightened. The line of least resistance is now for rupee to decline and RBI will prefer flexibility over interest rates as against exchange rate.

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 13 Aug, 2022
  Daily Poll
COVID-19 has directly affected your business
 Yes
 No
 Can't say
  Commented Stories
» GIC Re's revenue from obligatory cession threatened(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter