Rupee struggling for getting up

There is some weakness inbuilt of rupee due to the huge current account deficit and large amount of foreign currency convertible bonds coming for redemption. In past few months, Indian Rupee has depreciated by quite a bit. Rupee has gone from 44.08 to 53.93, 20% fall and it affected all sectors. For example, IT sector is having benefit , as their earnings are in dollars and with the worth of the dollar increasing, their income also increases. But real estate sector has been affected due to the rupee depreciation.The Rupee depreciated as much as 72 paisa in a single day as the stocks were encashed in dollars due to the massive selling of equities. Sensex was closed at 300 points and rupee lost around 10%, since it touched its peak in February. Since March, Rupee has depreciated almost 9% on account of local macroeconomics issues. Current account and fiscal deficits are hurting the Indian currency.Consumer products such as digital cameras, television, personal computers prises are set to increase once again in next month. Whereas, companies of mobile phone makers and car makers are under pressure to follow suit due to the rupee’s fall. Moving forward, participants of market will watch the movement of the rupee, and it will decide the market trend. However, with crude oil prices correcting by 10% from their heights, top notch corporate earnings behind us and the postponement of GAAR by a year, the present prices offer an opportunity to enter quality stocks.
Indian currency is growing weak adding woes to investors. While the Reserve Bank of India has stepped in and sold dollars via state-run banks in early trade to boost the rupee. Due to selling of  American currency by exporters and bank rupee. The dollar weakened slightly against the rupee despite quoting higher against other currencies in the overseas market in last week. A Forex dealer stated that, “Fresh selling of dollars from banks and exporters on the back of recovery in the equity market boosted the rupee value against the dollar”. In last few days, Reserve Bank of India (RBI) believed to had sold over $1 billion to check the volatility in the rupee but has met with little success only. With the foreign exchange reserves falling to $ 290 billion compared with $ 306 billion reported on 3rd December.Reserve Bank of India has also taken some policy initiatives such as hiking the ECB/Buyers Credit borrowing rate, removing the banks' swap cap from $100 million earlier. Further, the Central Government has also started taking important policy decisions in the form of allowing 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.
Central bank can take certain further steps for rupee, so that it does not get depreciated.è Reserve Bank of India can open a separate window for payment of oil imports, as it is the biggest demand for foreign exchange. From total India’s imports, one-third is of Oil imports account. Pressure from the currency market can be substantially reduced by providing dollars directly to oil importers through a separate central bank window. It recommends shifting at least part of the nearly $12 billion worth of monthly demand for foreign exchange for crude oil purchases.

è Government / Reserve Bank of India could issue a hard currency bond for NRI’s. Government could announce the issuance of a Diaspora bond as India has a large Diaspora and bond should be of three to five years maturity period.

è The Brokerage believes some additional measures like directing exporters to repatriate most of their foreign currency earnings could also be taken. There could be restrictions on futures market transactions, and measures to discourage imports as well.


Therefore, the pace of rupee depreciation should slow down. Since 49 has now become an important support, importers should keep buying the good dips to hedge their imports of at least the next six months. Exporters, looking to the RBI's discomfiture may sell here targeting 50.80 levels in the short-term with a stop at 52.75.

This talks about Technology Management in carrying out cell phones, smartphones, smart phone, mobile, it firms, android phones, laptops, technologies.