As the emerging markets contagion spreads, the BRIC nations are coming under increasing pressure in the capital markets. As discussed previously Brazil and Russia are witnessing new multi-year/record lows in their currency valuations. The Indian rupee is still above the all-time low (last summer), but at 63.5 rupees to the dollar, we are not far from that record.
Tag Archive for India
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This simple trading strategy points to rationale for currency wars – Sober Look
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Looking for a simple way to outperform the market on your international equity index portfolio? Here is a simple algorithm from JPMorgan (warning: do not try this at home). Select two countries with the worst performing currencies (against USD) over th…
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India’s new central banker to face impossible choices – Sober Look
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India is about to get a new new central bank governor, Raghuram Rajan, a University of Chicago economist with outstanding academic credentials. He is expected to start this Thursday, smack in the middle of a financial crisis the likes of which have not…
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RBI sells dollars directly to oil importers; kicks the can down the road – Sober Look
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India’s central bank, the RBI, is trying new measures to stabilize the rupee. One of the key sources of pressure on the currency is the nation’s need to import fuel. Oil companies have to buy dollars (sell rupees) in order to purchase crude oil in the …
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Latest on India: rupee in free fall, stagflation setting in, risks of sovereign downgrade and investor panic rising – Sober Look
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This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. This is beginning to sound like a broken record, but India’s currency has come under severe pressure – again. India’s central bank, the RBI, seems to have completely lost control over the rupee. The currency broke through 67…
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The end of cheap US cash claims another victim: Indonesia – Sober Look
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This is a syndicated repost courtesy of Sober Look. To view original, click here. Reposted with permission. In a fashion similar to what became known as the “Asian Contagion” in the late 90s, the current stress in emerging economies has been spreading. One of the nations to experience financial stress recently has been Indonesia, Southeast…
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India, Brazil should thank Bernanke for their currency woes – Sober Look
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India and Brazil are struggling to regain control of their currencies as both the rupee and the real touch new lows (all-time record for the rupee). It is remarkable how violent the corrections have been in just the past 3 months:Green = rupees per dol…
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India’s crisis escalates; brings back memories of the 1991 gold airlift- Sober Look
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Yesterday India’s central bank (the RBI) imposed what amounts to a form of currency controls, while trying to attract foreign deposits.Bloomberg: – The RBI cut the amount local companies can invest overseas without seeking approval to 100 percent of th…
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The rupee near all-time lows again as RBI confuses the market; economic indicators deteriorate further – Sober Look
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India’s authorities are having a tough time clearly defining what they are willing to do in order to stem the rupee’s decline.Reuters: – Mixed signals from the Reserve Bank of India and the government over how to handle the fall in the rupee has contri…
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India’s short-term yield goes vertical; RBI struggling – Sober Look
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Here is a quick update on India’s ongoing financial stress. Capital outflows from stocks over the past couple of months reached a post-2008 high, prompting Goldman to downgrade the nation’s equity market.
Bloomberg: – Foreigners sold a net $2 billion of domestic debt last month through July 30, extending the record $5.4 billion withdrawal in June. The two-month outflow from stocks reached $2.8 billion, the most since the global financial crisis in November 2008, regulatory and exchange data compiled by Bloomberg show. Goldman Sachs cut its rating on the nation’s shares to underweight in a report dated July 31.
The rupee is trading near record lows as RBI’s recent actions are proving to be ineffective. With liquidity conditions remaining tight, the short end of the government curve is under severe pressure. The one-year note yield has gone vertical, approaching 10%. The yield curve remains heavily inverted, with further economic slowdown sure to follow.
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| Source: Investing.com |
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