India Forex - Forex Trading in India

India Thursday 20 May 2010 - Indian Trade Secretary Khullar said that April exports was up 36.2% y/y at $16.9 bln while imports rose 43.3% y/y to $27.3 bln. The inferred trade deficit as such widened to $10.4 bln in April from $7.8 bln March. This is noty alotogether surprising given the huge jump in March exports to some $19.9 bln which then could have seen subsequents month’s exports normalizing again.

Imports rise was at a faster pace with the sequential dip also seen to ne much more subdued compared to exports. this is alltributabel to a moremeasured rise in March leaving resulting in less “correction” ans also due to the support factor from high global commodity prices. We expect that India’s trade deficit could remain a tad soft though dip in commodity prices in May due to Eurozone debt woes could poetntially narrow the deficit at the margin; as a corollary, upside in exports is also expected to be limited. The wider deficit in April is seen supportive of the USD/INR given C/A weakness dragging the Capital account support down.

India Monday 17 May 2010: After the initial controversy, the Indian government’s experiment to deploy $5 billion of the Reserve Bank of India’s foreign exchange reserves to other avenues disappeared from front pages.

The scheme is not only alive, it’s ticking over satisfactorily. India Infrastructure Finance Corporation, UK, (IIFC) — the nodal agency based in the UK to route the forex, has sanctioned $1.57 billion in the first 18 months of existence, with a profit after tax (PAT) of $19.5 million. Ravneet Kaur, joint secretary, ministry of finance and CMD of IIFC India, said: “As an experiment, the scheme is doing very well, and there is a lot of scope. There is no justification we could look at to scale back the scheme. We could even go back to RBI and look at a further increase,” she said. IIFC UK’s profits will be ploughed back to expand its operations further, Ms Kaur said.

Given the time frame for infrastructure project financing, IIFC UK officials estimate that it will be some years before most of the current funds are disbursed. IIFC UK, a wholly-owned subsidiary of the parent company in India, was set up specifically with a mandate to route $5 billion from RBI’s forex, for overseas purchase of capital goods equipment in the infrastructure sector. It started operations around September 2008. IIFC has financed 13 proposals across a range of sectors, mainly power, ports, railways, and metro projects. It has around $1.2 million of proposals in the pipeline at present. The main worry about deploying RBI’s forex reserves in infrastructure financing was that the money could find its way back into the Indian market, creating monetary pressures.

The scheme has been ring-fenced such that IIFC UK directly pays the overseas seller, and the Indian importer gets the equipment, in such a way that the forex reserves never enter the country. In addition, IIFC works with a consortium of bankers for various infrastructure proposals, and limits its exposure in any one project. Despite the global recession, Ms Kaur said,” “except for a short period in 2008, Indian corporates are accessing overseas funds, and the flow of funds to the infrastructure sector is on the increase.”

India Tuesday 20 April 2010 - Continuing the trajectory of growth, government has earned more than Rs 5500 cr as foreign exchange from tourists in March this year.

The total foreign exchange earnings in March this year were Rs 5,507 crore as compared to Rs 4,437 crore in the corresponding period last year and Rs 5,035 crore in March 2008, an official statement said.

The number of total foreign visitors during March this year were 4.72 lakh as against 4.18 lakh in March 2009 and 4.80 lakh in March 2008, it said.

The growth rate in forex in March 2010 over the same period last year was 24.1 per cent as compared to negative growth rate of 11.9 per cent in March 2009 over March 2008.

As far as foreign tourist arrival is concerned, there has been a growth of 12.9 per cent in March this year over the corresponding period last year as compared to a negative growth of 12.9 per cent registered in March 2009 over March 2008.

A total of 15.63 lakh foreign tourists visited the country during January-March 2010 as compared to 13.86 lakh in the corresponding period last year, the statement said.

India Friday 26 February 2010 - In its efforts to improve foreign exchange reserves, India has now become the 10th largest gold-holding nation in the world. It has also emerged as the fourth-largest foreign exchange reserves holder only after China, Japan and Russia, says the Economic Survey 2009-10.

“In September last, the International Monetary Fund decided to sell 403.3 tonnes of gold as a central element of its ‘New Income Model’ and to increase its resources for lending to low-income countries.

“Consequent of this, the Reserve Bank of India concluded the purchase of 200 tonnes of gold from the IMF at the cost of $6.7 billion as part of its foreign exchange reserves management operation,” the survey says.

“With this purchase, gold holdings in the country’s foreign exchange reserves have increased from 357.7 tonnes to 557.7 tonnes, which is about 6 per cent of the reserves. Post-purchase, India has become the 10th largest official gold-holding country in the world,” it adds.

In another interesting development, India is ranked fourth in terms of foreign exchange reserves at $283.5 billion, only behind China ($2,399.2 billion), Japan ($1,049.4 billion) and Russia ($439 billion), says the Economic Survey.

India Monday 15 February 2010: The rupee strengthened on some bunched up dollar inflows in early Monday trade, but the lack of directional cues from other regional peers and a choppy domestic stock market capped further gains. At 11:20 a.m. (0550 GMT), the partially convertible rupee was at 46.37/38 per dollar, stronger than its 46.50/51 previous close last Thursday.

Indian financial markets were shut on Feb. 12 for a local holiday. Most Asian markets are shut on Monday and Tuesday for Lunar New Year holidays, while New York is shut on Monday for the Presidents Day holiday. “Rupee is stronger due to lack of outflows due to New York being shut and also some bunched up dollar inflows on account of Friday’s holiday, that is causing some selling in the market,” a senior dealer with a private bank said.

Dealers said the market would be rangebound in lacklustre trade in the absence of fresh triggers, with inflation data for January due around noon watched for further direction. India’s annual wholesale price inflation in January is seen at 8.21 percent, according to a Reuters survey. This compares with an annual rise of 7.31 percent in December.

Fuel costs in India flared up in late January and food prices rose for a third straight week, data last Thursday showed,, while last Friday’s data revealed India’s industrial output smashed forecasts to grow at its fastest pace on record in December.

Indian shares were choppy in early trade providing little direction to the rupee. The euro hovered near 9-month lows against the U.S. dollar on Monday, as doubts whether policymakers in the eurozone will help debt-laden Greece intensified, prompting investors to add to long positions in the greenback.

One-month offshore non-deliverable forward contracts were quoted at 46.34/44, little changed from the onshore spot rate. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were both quoting at 46.40, with the total traded volume on the two exchanges at about $975 million.

India Monday 14 December 2009: The dollar dropped against the euro in Asia on Monday as worries eased over Dubai’s debt problems, rekindling demand for growth-sensitive currencies, dealers said.

The euro rose to 1.4677 dollars in Tokyo afternoon trade from 1.4613 in New York late Friday. The European currency’s rise came after the Dubai government said it had received 10-billion-dollar financing from Abu Dhabi.

Dubai said it would pay 4.1 billion dollars to cover Islamic bonds issued by its Nakheel property developer which mature Monday.

“The impact of the news is positive for the euro,” Sumitomo Mitsui Banking Corp. trader Satoshi Okagawa told Dow Jones Newswires.

The European currency is seen as a riskier bet than the dollar and the yen and tends to benefit from improved global economic sentiment.

The dollar also declined to 88.67 yen from 89.08, giving back some of its strong gains seen late last week in response to positive US economic data. The euro fell to 130.21 yen from 130.35.

The dollar had jumped on Friday as stronger-than-expected reports on US retail sales and consumer confidence boosted the odds that the Federal Reserve will begin the process of lifting interest rates, dealers said.

Dealers said the market was little moved by the results of the Bank of Japan’s closely-watched business sentiment survey, which showed firms plan to slash investment, despite a further improvement in business confidence.

“Planned capital spending was weak, offsetting the better-than-expected sentiment among manufacturers,” said Societe Generale forex head Yuji Saito.

Against Asian currencies, the dollar rose to 9,460 Indonesian rupiah from 9,445 on Friday, to 32.27 Taiwan dollars from 32.22, to 1.3911 Singapore dollars from 1.3896, and to 46.31 Philippine pesos from 46.12.

At the same time the greenback fell to 1,158.00 South Korean won from 1,164.70, while holding steady at 33.12 Thai baht.

NEW DELHI: The Supreme Court on Wednesday dismissed the Income-Tax department plea that companies cannot claim deductions against tax liability on account of losses due to foreign exchange rate fluctuations.

A bench headed by Justice S H Kapadia dismissed the department’s petitions filed against 33 foreign and domestic companies including Maruti Udyog, Jindal Strips, GE Power Services, Perfetti India, Seagram, Escorts, Dupont, Woodward Governor India, Honda Siel, Turner International and others. The department had submitted companies cannot claim deductions on such losses.

The rupee rose to its highest in six weeks on Wednesday, underpinned by gains in Asian shares and the dollar’s weakness against major currencies.

At 9:06 a.m., the partially convertible rupee was at 47.8950/9050 per dollar, compared with the previous close of 47.9550/9650. In early deals, the rupee hit 47.85, its highest since Aug 10.

India Tuesday 22 September 2009 - The Indian rupee was flat on Tuesday as a rise in the stock market to fresh 16-month highs was offset by oil companies buying dollars to pay for their imports.

At 11:07 a.m. (0537 GMT), the partially convertible rupee INR=IN was at 48.17/18, not far from Friday’s close of 48.13/48.14. The market was closed on Monday for a holiday.

The rupee touched a low of 48.22 in early deals

“There was a sharp rise in the dollar in early deals due to some oil companies buying, but selling by some foreign banks limited the dollar’s rise,” said Naveen Raghuvanshi, an associate vice president with Development Credit Bank who expects the rupee to trade a 48.10-48.25 range during the day.

Indian shares were up 0.8 percent in morning trade, extending last week’s 16-month highs on hopes of strong quarterly earnings.

Traders expect there could be some dollar buying this week as unsuccessful applications for the Oil India initial public offering are refunded. The company raised $570 million in the offer, which was covered nearly 31 times.
The dollar dipped on Tuesday after rallying broadly on Monday, with traders positioning for this week’s Federal Reserve monetary policy meet and a Group of 20 summit.

Against a basket of currencies, the dollar .DXY was down 0.3 percent at 76.548, but holding well above a one-year low of 76.01 struck on Sept. 17.

One-month offshore non-deliverable forward rupee contracts PNDF were quoting at 48.17/27.

India Thursday 17 September 2009 : The Indian rupee rose to a new one-month high after gaining 26 paise against the US currency in the opening trade today as exporters sold dollar, which weakened against major currencies.

At the Interbank Foreign Exchange (Forex) market, the domestic unit gained 26 paise at 47.97/ $ over the previous close.

Yesterday, the rupee closed 40 paise higher at 48.23/24.

Dealers attributed persistent rise in the rupee to strong rally in equities.

The BSE benchmark Sensex climbed to a 16-month high in yesterday’s trade.

They said weak dollar against euro and some other currencies and dollar selling by exporters and also boosted the rupee sentiment.