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Indian Currency in Doldrums-Path for recovery



If anything, that’s in news for a quite long time is the slumping in Indian Rupee against US Dollar. The situation is so numb that it has nosedived to hit an all time low of INR 69.10 against US Dollar. Although it showed sign of recovery as it had in fact fall down below INR 68.95-it’s worst performance in past 5 years. However, this plummeting of Indian Currency has already set a panic button on other emerging currencies, business, Forex, Sensex and financial markets. Key attributes for this downfall in Indian currency over US Dollar are as stated:

A) Upsurge in the crude oil prices globally: - The key factor for this ongoing crisis is the global upsurge of the crude oil prices. It itself contributes to 80 percentage of the crisis. This upsurge in oil prices attributes to number of sub factors like • United States of America’s Intervention to monopolize and attain supremacy of becoming global powerhouse by winning over the crude oil countries. They as well plan to invest in their own crude oil Inventories etc. • This has also lead to an ugly tussle between USA and the oil rich countries like Iran, Middle eastern countries etc.

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B) Forex Trades and Markets tumble: USA federal laws are expected to be tougher and the whole monetary policy is expected to be on tight noose. Economist globally predict that this will lead to a slump in US economy again. This will lead to surplus pooling off funds, shares, monetary aids to US instead of Indian and other developing economies. Prima facie code of conduct describes this as a measure of US tactical law system to curb the debts and oversee the total yields (Bonds vs yields always act opposite ways).

C) Exporters, Investors behavioral variation: To survive off the bullish dollar supremacy over Rupees and other currencies, Investors, Exporters are reeling under heat and hence choose the Dollar more preferable over other currencies. According to research and market analysts from Dun and Bradstreet, KPMG- Dellolite and co, Morgan Stanley etc, upsurge of Dollar Index by 6.5-7% over other currencies have led to higher purchasing power in Dollar vs Rupee and other currencies.

So, is there any end to this nightmarish ongoing issue? The answer is definitely a positive one and that though the climbing is very steep, it’s not impossible. Reserve Bank of India have already started pooling up for more supply chain of Money through forex reserves and shares, bonds and debentures. RBI also have devised to set up uniform interest rates for appealing to get more capital inflow than outflow. The only area of concern that still hovers round the developing economies (India) is the surge in Interest rates which soon will even be hiked more as this bullish trend is likely to continue till the year end.

The event was attended by the (SHCP) Secretario de Hacienda y Crédito Público (Finance Minister), José Antonio González Anaya, who commented that: “The stock market is and has been a fundamental engine for Mexico’s growth. Today a fundamental action becomes a reality. The entry of a new competitor is a crucial step and I believe that the players complement each other in order to grow and to create a securities market for all.” Also attending wereBernardo González Rosas, President of the National Banking and Securities Commission (CNBV), José Ramón Amieva, Mexico City’s Head of Government, José Méndez Fabre, President of the Mexican Association of Stock Market Institutions (AMIB), and Juan Pablo Castañón Castañón, President of the Business Coordinating Council (CCE), who mentioned that: “We are living in a historic moment... competition is always healthy... in view of the new challenges that we face as a country today, having access to competitive financing becomes a platform for the country's growth”.

Among the congratulatory messages, which included a video with messages from various stock exchanges around the world, Eduardo Carrillo Madero, Chairman of the Board and CEO of Finamex Casa de Bolsa, told Funds Society: “At Finamex Casa de Bolsa, we congratulate (BIVA), Bolsa Institucional de Valores on their start of operations today in our country, something that excites us because we will have the opportunity to continue being an ally, with the courage to support people’s financial education. Likewise, we are very proud of having being at the forefront of this new source of corporate financing, which provides another option for investors. We wish BIVA much success in its operations.” George Boone of EDM added that he is confident that BIVA's entry will help to broaden the local market. Meanwhile, President Enrique Pena Nieto wrote in his twitter account: "Today was the start of operations for BIVAMX, the new Institutional Stock Exchange that is the result of the #Reforma Financiera (Financial Reform). With state-of-the-art technology, this Stock Market will support Mexican companies and entrepreneurs so that they can grow and develop.”

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