Montek hopes rupee would stabilise soon

Dealers also said the rupee was weighed down by continued dollar demand from importers, mainly oil refiners, for their month-end requirements amid expectations of further rise in dollar overseas on lingering European debt worries

New Delhi: Amid sustained fall in the rupee’s value, the Plan panel today attributed the decline to volatility in the global currency market, but expressed the hope that the Indian currency would stabilise soon, reports PTI.

“It has been a period of enormous currency volatility and you are going to look at what has happened in the Indian currency market in the light of what is happening globally. I think it will settle down,” Planning Commission deputy chairman Montek Singh Ahluwalia said in an interview to a popular business television channel.

Meanwhile, the rupee on Monday plunged by 81 paise to close at nearly 33-month low of 52.15/16 against the US dollar.

“On the matter of the currency, it would be a very good idea for nobody to speculate. Even for the Reserve Bank of India (RBI), the sensible thing to do is to make whatever calls are necessary and let the market judge.

I wouldn't want to speculate on when and how and what.

These are relevant issues but these are issues that the RBI has to decide,” Mr Ahluwalia said.

The Indian rupee is the fourth most depreciated currency in the world and the most depreciated in the Asian continent.

The RBI has attributed the movement to demand-supply factors and said it is happening globally.

A weaker rupee is a matter of concern for India as it depends on imports for over 70% of its oil and gas requirements and the depreciation of the local currency has made imports more expensive.

The depreciation of the rupee comes at a time when the headline inflation has remained above the 9% mark for 11 consecutive months.

Asked about the RBI’s policy of not intervening in the market so far, he said, “I think the RBI is the agency responsible for exchange rate management, so I don’t want to second guess what they say. There is nothing surprising in what they have said. We are not targeting any particular rate.”

He said the policy that is being followed is to ensure that the “exchange rate should be market-determined, but the RBI stands by to intervene if it finds that conditions have become too disorderly. So that’s really the RBI's call.”

Pointing to global events, he said that with multiple currencies moving up and down, it is not clear what should be a stable rate of exchange.

He added that the recent decision to enhance foreign institutional investor (FII) investment limits in the bond market is a positive one.

“For a long time, it's been felt in India that while we should limit the exposure of our corporates to foreign-denominated debt, we need not be so concerned about that exposure as long as the debt is rupee-denominated.

“So this was in fact just a move in the right direction and very much in line with what the government has been talking about earlier,” he said.

FIIs have pulled out $344.16 million in the last four sessions since 15th November.

Dealers also said the rupee was weighed down by continued dollar demand from importers, mainly oil refiners, for their month-end requirements amid expectations of further rise in dollar overseas on lingering European debt worries.

The dollar index was up by nearly 0.5% against a basket of currencies while New York crude oil was trading above $96 a barrel in European market yesterday.

“The local unit performed worst among all Asian and developing market currencies. The dollar has gained against the rupee mainly on account of its gaining strength globally with the US deficit cut accord getting a setback in the US Congress in addition to persistent weakness in the Indian rupee,” Abhishek Goenka, CEO, India Forex Advisors said.

The rupee premium for the forward dollar also slumped further on sustained receivings by exporters.

The benchmark six-month forward dollar premium payable in April dipped to 73-76 paise from 91-93 paise last weekend and far-forward contracts maturing in October also ended sharply lower at 129-132 paise from 157-159 paise previously.

The RBI fixed the reference rate for the US dollar at Rs51.7165 and for the euro at Rs69.8883.

The rupee remained weak against the pound sterling to end at Rs81.59/61 from Friday’s level of Rs81.32/34 and dropped further to Rs70.08/10 per euro from Rs69.45/47 previously.

It, too stumbled against the Japanese yen to Rs67.82/84 per 100 yen from last close of Rs66.91/93.

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COMMENTS

Rambabu Shastri

5 years ago

The highly educated Monty, along with the highly education Manu and highly educated Chiddu cannot stop the fall of the rupee, the rise of the inflation and the economic downturn of India within the next year. Let them put the whole government machinery behind it, they will not be able to stop it.This is based upon the predictions of a Chennai based astrologer who said India will see huge rise in land prices, stock prices and so on till 2012. After that, it is back to the good old days.

Govt to seek passage of 16 key economic legislations

The long-pending Pension Fund Regulatory and Development Authority Bill, which will pave the way for 26% foreign investment and will encourage the private sector participation in the pension sector, is among the 16 economic bills

New Delhi: Amid concerns of a policy paralysis expressed by a section of industry, the government will seek passage of 16 key economic bills in the Winter session of Parliament starting tomorrow, to give a clear signal that it is moving ahead with the second generation financial reforms, reports PTI.

The long-pending Pension Fund Regulatory and Development Authority Bill (PFRDA), which will pave the way for 26% foreign investment and will encourage the private sector participation in the pension sector, is among the 16 economic bills.

The Direct Taxes Code Bill and the Goods and Services Tax Bill, are unlikely to be taken up in the month-long session as the government has not received reports of the Parliamentary Standing Committee.

The Insurance Bill which seeks to raise the foreign direct investment in the insurance sector from 26% to 49% is also pending with the committee headed by senior BJP leader and former finance minister Yashwant Sinha.

These bills are considered important for the next generation reforms and the government has been making requests to the Parliamentary panel to expeditiously complete the work.

The government needs to take the opposition parties on board, particularly for the GST since it would require two-third majority in both the Houses of Parliament and ratification by at least half of the state assemblies.

In the recent past, a section of India Inc had blamed the government for inaction on the policy front, especially at a time when efforts were needed to fight slow down and combat the impact of the global crisis on domestic economy.

India started the economic reforms in 1991 when the country faced critical foreign exchange problems.

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GSM operators add 7.12 million new subscribers in October: COAI

Bharti Airtel, the largest GSM player, added 0.94 million users, taking its total subscriber base to 173.73 million, the data released by the Cellular Operators Association of India (COAI) showed. The company had a 27.78% market share at the end of October

New Delhi: GSM operators added 7.12 million new subscribers in October, compared to 6.52 million additions in the previous month. With this, the GSM subscriber base in the country stood at 625.41 million on 31 October 2011, reports PTI.

In October, Bharti Airtel, the largest GSM player, added 0.94 million users, taking its total subscriber base to 173.73 million, the data released by the Cellular Operators Association of India (COAI) showed.

The company had a 27.78% market share at the end of October.

Vodafone Essar, with a 23.33% market share, notched up 0.92 million new subscribers during the month. Its subscriber base reached 145.91 million in October.

Aditya Birla group firm Idea Cellular saw the highest number of additions during the month, with 1.63 million new users taking its total subscriber base to 101.81 million, while Aircel added 0.48 million customers to take its subscriber base to 60.28 million.

State-owned telecom firms BSNL and MTNL added 0.51 million and 34,919 new users, respectively, taking their subscriber base to 91.58 million and 5.36 million.

In addition, MTS added 0.79 million customers in the month of October 2011, taking its total customer base to 14.06 million.

The COAI data excludes data from Reliance Communications.

GSM (Global System for Mobile Communications) is the most popular standard for mobile telephony systems in the world.

The other technology platform on which Indian telcos offer services is CDMA (Code Division Multiple Access), where players such as Tata Teleservices (TTSL), RCom and MTS are the main operators. TTSL and RCom offer both GSM and CDMA services.

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