Earlier it was the buying from Crude Oil producers in the domestic markets which were hedging their positions against the rise in Crude Oil prices which was the main culprit of falling Rupee, now it is the inflationary concerns which has bugged out to vex the domestic currency. Having, said that we haven’t undermined the affect of Inflation in the previous weeks but have just tried to bring in as an additional induction to the Rupee depression. Inflation (WPI) for the week ending 2nd May 2008 is 7.80%. We are more worried about the method of calculation of WPI although Inflation remains in our radar.
These WPI numbers calculated by MOSPI (Ministry of Statistics, Programme And Implementation) is questioned by many including us, the Staticians normally do not get the actual rates from the markets which is used to calculate much hyped WPI, and if they don’t get the rates they use the ones which were earlier taken to calculate the WPI. This WPI is not real as is highlighted because till the time you get the real quotes the prices have shooted to a much larger extent.
The never ending debate CPI Vs WPI continues, CPI is the measure of calculation of Inflation on a Retail Basis, or the Consumer’s point of view, where the prices are much more high-pitched than that in WPI arena. But the government still is numb on that part, because WHO LIKES HIGH NUMBERS IN INFLATION?..... and at the time when elections are round the corner.
Now the other side of the coin, Demand has also been seen picking up from Non Deliverable Forward Markets for Dollars, these our markets where arbitrage positions are taken in Dollar and Rupee and are mostly operated from Singapore.Government has already sucked Rs 18500 crores from the system by hiking CRR in back to back tranches. Foreign Exchange funds by FIIs have continued to demotivate, as the markets remain lackluster and making sublime to ridiculous is the fact that these investors are waiting markets to correct further which suggests that the dismal performance of Rupee against Dollar will continue as the bankers get busy setting aside funds for CRR.
These WPI numbers calculated by MOSPI (Ministry of Statistics, Programme And Implementation) is questioned by many including us, the Staticians normally do not get the actual rates from the markets which is used to calculate much hyped WPI, and if they don’t get the rates they use the ones which were earlier taken to calculate the WPI. This WPI is not real as is highlighted because till the time you get the real quotes the prices have shooted to a much larger extent.
The never ending debate CPI Vs WPI continues, CPI is the measure of calculation of Inflation on a Retail Basis, or the Consumer’s point of view, where the prices are much more high-pitched than that in WPI arena. But the government still is numb on that part, because WHO LIKES HIGH NUMBERS IN INFLATION?..... and at the time when elections are round the corner.
Now the other side of the coin, Demand has also been seen picking up from Non Deliverable Forward Markets for Dollars, these our markets where arbitrage positions are taken in Dollar and Rupee and are mostly operated from Singapore.Government has already sucked Rs 18500 crores from the system by hiking CRR in back to back tranches. Foreign Exchange funds by FIIs have continued to demotivate, as the markets remain lackluster and making sublime to ridiculous is the fact that these investors are waiting markets to correct further which suggests that the dismal performance of Rupee against Dollar will continue as the bankers get busy setting aside funds for CRR.
Rupee is now trading at 42.89 against the Dollar after touching 42.93, which is so far its intra day high. Rupee will keep its bearish undertone because of the strength in Crude oil ahead of US summer driving season, on the other hand FIIs seem to have a pessimistic outlook on the Indian markets which will also be impacting it negatively, and please don’t forget INFLATION in the process…...
