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Q.

Why rupee is going down against dollars and how far it may slide ?

Tags: money, going, slide
Asked by azam khan, 07 Dec '11 01:36 pm
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Answers (4)

 
1.

A similar thought was voiced by Reserve Bank of India Deputy Governor Subir Gokarn, who told Bloomberg the central bank had tools such as capital controls to arrest the rupees slide.

AndrewMiddleton/Flickr

The rupee has tumbled about 13 percent against the dollar this year, making it Asias worst-performing currency, and has placed monetary policy-makers in a fix because of its implications on the current account deficit, inflation and capital inflows.

Some relief for the currency came last week as it logged its biggest single-session gains since 2009 1.4 percent on 1 December, buoyed by hopes of dollar inflows, one day after the worlds six major central banks, including the Federal Reserve, announced co-ordinated monetary action to help ease a growing liquidity crunch triggered by the eurozone crisis.

Unfortunately, those gains are likely to be short-lived. Among the key reasons for the rupees plunge has been heightened aversion to risk-taking by global investors, who pro ...more
Answered by jameel ahmed, 07 Dec '11 03:47 pm

 
  
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2.

The finance minister and other government officials may try to reduce the importance of this sudden development by blaming it on an appreciating dollar. However, as is evident from the chart (Rupee vs the dollar index), the strengthening dollar only partially explains this phenomenon. Though the correlation between the two currencies was strong till October and the rupee weakened as the dollar rose, it has changed after that. When the dollar index lost some of its steam during October, the rupee refused to gain. The rupee continued with its weakness once again when the dollar index showed a small improvement in November. While the dollar index is still below its recent peak, which it achieved on 4 October, the rupee weakened from 49.40 to 52.37 nowan additional loss of 6%.

Due to the structural problems in the US, all market players assumed that the dollar would weaken further, and so almost everyone was on the 'short' side. This is why a sudden jump in the dollar, triggered by the ...more
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Answered by anil garg, 12 Dec '11 09:36 pm

 
  
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3.

Rupee is gaining again from 53-51.5 aa chuka hai wait it will come 48 in few days
Answered by kamal purohit, 07 Dec '11 01:37 pm

 
  
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4.

Sliding period is over for the time being.
Answered by Mrinalendra Banerjee, 07 Dec '11 01:37 pm

 
  
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