Why Doller Value Lowers exactly On Adsence Payment Date? I was wondering from last six months that exactly on the date of Adsence payment, doller value lowers, and all other time it goes above 49 INR. I got the answer for this. The answer lies in dollar-rupee calculation. As per the latest data put out by RBI, India’s currency reserves have now declined by $60.44 billion since the end of March 2008, and they are down by $6.04 billion since the end of December 2008.
For the week ended Feb 27th 2009, forex reserves declined by $249 million to $249.27 billion. And why has there been a fall in the forex reserves? Mainly due to revaluation of global currencies like the euro and pound sterling against US dollar, and more importantly, the massive selling of Indian investments by FIIs.
On 7th March 2009, the rupee hit a new low at Rs.51.82 v/s US dollar. So why is the rupee falling? One of the biggest reasons is obviously the selling by FIIs. And why are they selling? Obviously because of the political instability and the reports of soaring fiscal deficit.
And this is important point.
Also forex analysts state that oil refiners are amongst the biggest dollar buyers in the Indian currency market and their demand is especially high towards the end of a month as they make the payments for their imports.
When Rupee is going to appreciate?
The rupee vis-à-vis the US dollar is expected to stay low for some more months now. At least till the elections are over. Only after sentiments improve and India is once again viewed in a positive light, will FIIs come back and start investing. And it is only then that the rupee will appreciate. source
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