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Archive for the 'Indian Forex' Category

IndusInd Bank bags mandate for Haj travel-related Forex biz

Written by admin on Thursday, July 29th, 2010 in Indian Forex.

India Thursday 29 July 2010: Private sector lender IndusInd Bank today said that it has received a mandate from the Haj Committee of India for distributing Saudi Riyal currency notes among all government-sponsored Haj pilgrims.

This is the second time that the bank has bid for this mandate, IndusInd Bank said in a statement.

It is estimated that this year, nearly 115,000 pilgrims will leave for Haj from India under the government quota. Apart from this, another 50,000 pilgrims are expected to go to Saudi Arabia from India under private quota, it said.

IndusInd Bank has emerged as a significant player in retail remittances, especially on payments coming from Middle-East countries, it said.

The bank works closely with over 45 partner exchange houses and banks for India-bound payments, it added.

Cabinet likely to finalise Indian Rupee symbol today

Written by admin on Thursday, July 15th, 2010 in Indian Forex.

India Thursday 15 July 2010: The Union Cabinet is expected to finalise the design of the rupee on Thursday.
It is expected to give its nod to the numerical representation for the Indian rupee that could be the Hindi alphabet R with two lines.

In the budget this year, Finance Minister Pranab Mukherjee had said in the ensuing year, we intend to formalise a symbol for the Indian rupee, which reflects and captures the Indian ethos and culture.

“With this, the rupee will join the select club of currencies, such as the US dollar, British pound sterling, euro and Japanese yen that have a clear distinguishing identity, he added.

Currently, the abbreviation of the Indian Rupee, ‘Re’ or ‘Rs’ is also used by Pakistan, Nepal and Sri Lanka.

Tied to the world, Forex reserve is key buffer: RBI study

Written by admin on Friday, July 2nd, 2010 in Indian Forex.

India Friday 2 July 2010 - Following the global financial crisis that started in late 2008, the argument that India is decoupled from the rest of the world does not hold good, says a study released on Thursday by the Reserve Bank of India (RBI).

The Report on Currency and Finance, by the department of economic analysis and policy of the central bank, said India and other emerging market economies are now more closely linked to the global economy than in the 1990s.

The effect of this was particularly visible after the global financial crisis that emerged after the collapse of Lehman Brothers Holdings Inc. in September 2008.

“Until the global crisis, the Indian economy exhibited remarkable resilience to various adverse external developments, despite the increasing openness of the economy since the 1990s,” the study noted.

However, “global developments became important for the economy due to the significant increase in trade and finance openness,” it pointed out, adding that while the share of exports and imports in the aggregate demand has risen sharply during the current decade compared to the 1980s and 1990s, that of private consumption has fallen.

The shift in the make-up of aggregate demand led to the Indian economy becoming more vulnerable to external shocks, the report said,

This was reflected in the decline in GDP growth of the Indian economy, which fell 3% from its 2006-07 peak. Interestingly, the slowdown happened despite the banking and financial system in the country remaining “unimpaired”, the report said,

“This intuitively reveals that, in the current context, the decoupling hypothesis may not be tenable in the case of India and other emerging market economies,” it said.

However, RBI deputy governor Subir Gokarn cautioned the study should not be interpreted as representing the central bank’s view.

According to the study, openness in trade has facilitated a higher capital account openness and this “elevated synchronization was eventually reflected in larger transmission of global developments to the Indian economy”.

In particular, financial channels have been “found to be more dominant in transmitting the effects of global developments to the Indian economy during the recent period”, the study pointed out.

The report, quoting RBI governor D. Subbarao, said in the absence of a sufficient cushion of foreign exchange reserves, arresting the pressure on the exchange rate would perhaps have been very challenging.

Indeed, the accumulation of foreign exchange came in handy during the crisis, as the US Reserve extended swap facilities to central banks around the world, underlining the importance of creating a large foreign exchange buffer.

The study also emphasized the importance of strong bond markets and social security nets for emerging markets, including India.

Echoing RBI’s view on government borrowing, the study said “the reversal of monetary accommodation cannot be effective unless there is also a rollback of government borrowing”.

The Union government plans to borrow a record Rs4.57 trillion from the market this year, at a time when the economy is expected to grow at about 8%.

Inflation pressures and strong private demand could be additional constraints. In such a situation, “crowding out”, or when government borrowing hampers private sector borrowing, can become quite real, the study warned.

Indian Forex - Forex derivative rules to change

Written by admin on Wednesday, June 30th, 2010 in Indian Forex.

India Wednesday 30 June 2010 - The Reserve Bank of India (RBI) is finalising far-reaching changes to foreign exchange derivative guidelines to allow importers and exporters to write and sell put options and earn premium on them. A put option gives its buyer the right — but not the obligation — to sell a specified amount of an underlying asset at a set price within a specified time.

RBI has also dropped an earlier plan to ban ‘zero-cost structures’ – the most popular derivative product in corporate India. The new norms are expected to be notified soon.

Allowing exporters and importers directly in forex market and the leeway to offer zero-cost structures are moves aimed at expanding the size of the forex derivatives market. “The over-the-counter (OTC) forex market has about $13 billion transactions a day. Last year, it used to be about $18 billion. Activity is down this year due to the slowdown in global trade and fall in the balance of payment deficit,” said Golaka C Nath, senior vice-president, Clearing Corporation of India.

Rupee recovers by 7 paise to 46.95 per US Dollar

Written by admin on Thursday, June 10th, 2010 in Indian Forex.

India Thursday 10 June 2010 : The rupee today rebounded by seven paise to 46.95 against US Dollar in the early trade, as against its previous close of 47.02, on sell-off of the greenback by exporters and others, traders at the Interbank Foreign Exchange (FOREX) said.

Yesterday, it had slipped by seven paise to end in red at 47.02 a USD. The domestic currency today recovered following gains in the domestic equity market supported by fresh capital inflows by foreign funds, they added.

It later fluctuated in a wide range between 46.97 and 46.89 per USD.

Rupee recovers by 18 paise to 46.90 per US Dollar

Written by admin on Tuesday, June 8th, 2010 in Indian Forex.

India Tuesday 8 June 2010 : The rupee rebounded smartly today by 18 paise to 46.90 against US Dollar in the opening trade, following positive opening of the domestic equity market, traders at the Interbank Foreign Exchange (FOREX) said.

It had slipped by 23 paise to 47.08 a USD yesterday. The gains in the domestic equity market and the weakness of the Dollar against other major currencies, including Asian, weighed on the rupee sentiment, they added.

The local unit later fluctuated in a narrow range between 46.93 and 46.85 per USD in the intra day.

Rupee slides by 43 paise to 47.28 per US Dollar

Written by admin on Monday, June 7th, 2010 in Indian Forex.

India Monday 7 June 2010 : The rupee today fell sharply by 43 paise to 47.28 against US Dollar in the opening trade, as against its previous close of 46.85, on sustained demand for the greenback from bankers, traders at the Interbank Foreign Exchange (FOREX) said.

It had ended lower at 46.85 a USD, down by 17 paise, on Friday last. With this, it has fallen by 60 paise in last two days.

The local unit depreciated for the second day today following fresh capital outflows by foreign funds from domestic equity markets and the weakness of the US currency against other Asian peers, which weighed on the rupee sentiment, they added.

India Friday 4 June 2010 - The rupee strengthened on Thursday, mostly tracking the movement of the euro against the dollar globally and the local stock market, dealers said.
The partially convertible rupee ended at 46.69/70 per dollar, about 0.6% stronger than its close of 46.98/99 on Wednesday. “The market is very choppy, volatile. No one can take a view on the rupee now. It is only following the euro,” said a dealer at Union Bank of India. The Indian unit moved in a range of 46.47 to 46.70 per dollar during the day.

The recovery in stocks raised expectations of capital inflows while the dollar’s losses against major units also
helped. The greenback fell across the board on Thursday as a rise in share markets on the back of strong US economic data helped to cool extreme risk aversion. The index of the dollar against six major currencies was mostly flat at close of local trade. By 1130 GMT, the euro was at $1.2237, near the day’s high of $1.2326. The single currency has found its footing after sliding as low as $1.2110 on Tuesday, its weakest in more than four years.

On Friday, the rupee is expected to extend its choppy run amid lack of clarity on risk appetite globally and the euro’s movement, and may gyrate in a band of 46.50-46.65, dealers said. “Dealers will stay tight as they will wait to see the non-farm payroll data in the US,” said a foreign bank dealer. One-month offshore non-deliverable forward contracts were quoted at 46.80/90, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on NSE and MCX-SX both ended at 46.8450, with the total traded volume on the two exchanges at around $6.7 billion.

India Thursday 3 June 2010 : The rupee shot up for the second straight session today by 36 paise to 46.62 against US Dollar in the early trade, on fresh capital inflows by foreign funds into equity markets, traders at the Interbank Foreign Exchange (FOREX) said here.

It had ended 17 paise higher at 46.98 yesterday. The rupee contiuned to strengthen against the US currency today following increased capital inflows by foreign funds into equities and the weakness of Dollar against other Asian units, they added.

Later, the domestic currency fluctuated in a narrow range between 46.59 and 46.49 per USD in the intra day.

India Wednesday 2 June 2010 : The rupee appreciated by 11 paise to 47.05 a dollar in early trade on the Interbank Foreign Exchange on Wednesday, helped by gains on the stock market.

The rupee had closed lower by 80 paise–the biggest single-day fall in 15 months–at 47.16/17 against the dollar in yesterday’s trading on a sudden bearish turn in equities.

Forex dealers said fresh capital inflow into equities by foreign funds provided support to the rupee.

Meanwhile, the Bombay Stock Exchange index, Sensex, rose by 106.06 points, or 0.63 per cent, to 16,678.09 points in the opening trade today.



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