why did the rupee crash? - SydMHerald

Discussion in 'Currencies' started by finicky, Aug 21, 2013.

  1. finicky

    finicky Well-Known Member Silver Stacker

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    Excerpt:

    Even though China is growing faster right now, India has many more years of rapid expansion ahead simply because it hasn't urbanised or adopted new technologies to the same extent.
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    You'd think foreign investors would be desperate to get in on the ground floor of this long-term boom, but naturally they're more fickle - and less patient - than that. And since the value of the rupee in global markets depends on their demand as well as its supply, you have to consider both to understand what's happening.
    On the demand side, the key is to think about why people might want to exchange other currencies for rupees. Buying anything from India - goods, services, financial assets - can require rupees. When demand for any of these things rises, so does demand for rupees.
    Of course, when the rupee gains value, anything bought with rupees becomes more expensive for foreigners, so demand may equilibrate on its own.
    That hasn't happened yet for Indian assets. In April 2011, the International Monetary Fund forecast that India's economy would grow by a total of 37 per cent from 2013 through 2016. The fund's latest prediction, updated last month from the April 2013 figures, is for growth of just 28 percent in the same four-year period. It goes without saying that less potential for growth means less interest from foreign investors.


    Read more: http://www.smh.com.au/business/worl...rupee-crash-20130821-2saqf.html#ixzz2caaKUx00
     
  2. thatguy

    thatguy Active Member

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    Race to de base

    Nice setup with the gold tax, another example of gubbermints screwing the public
     

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