LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

73 will provide great resistance, but don’t rule out further rupee depreciation

“Nobody knows the future with certainty. We can, however, identify patterns of change.” (Alvin Toffler)- and it’s not at all easy to identify ‘patterns of change’ early, as components of ‘change’ alter shape and size willy-nilly. Hence, it’s utmost important to identify factors, the impact of which ultimately shape the “future”.  

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
73 will provide great resistance, but don’t rule out further rupee depreciation
If this is not enough, an almost full employment situation with adequate higher inflation is forcing the US Federal Reserve to hike interest rates. Image source: Reuters
Written By: ZeeBiz WebTeam
Updated: Mon, Sep 24, 2018
09:05 am
ZeeBiz WebDesk
RELATED NEWS
Fed policymakers double down on vow to keep interest rates near zero Fed policymakers double down on vow to keep interest rates near zero
Fed's Powell says central bank committed to using all tools to help recovery Fed's Powell says central bank committed to using all tools to help recovery
Fed touts economic recovery, vows to keep interest rates low Fed touts economic recovery, vows to keep interest rates low
Mask-wearing key to US economic recovery: Fed official Mask-wearing key to US economic recovery: Fed official
Fed adds Apple, Anheuser-Busch, Expedia to its bond holdings Fed adds Apple, Anheuser-Busch, Expedia to its bond holdings

“Nobody knows the future with certainty. We can, however, identify patterns of change.” (Alvin Toffler)- and it’s not at all easy to identify ‘patterns of change’ early, as components of ‘change’ alter shape and size willy-nilly. Hence, it’s utmost important to identify factors, the impact of which ultimately shape the “future”. Now, to understand this philosophical construct against a harsh backdrop of real events that have shaped ‘markets’ or would shape the “markets”, is a challenge, I would try to decipher here.

It’s like old times again: Of late, a lot of people have started likening recent bouts of protectionism to what had prevailed during years leading to “great depression”. Under the US President Don In a fresh salvo last week, as much as $200 billion of Chinese exports to the US had been brought under special tariffs of varying degrees. This has resulted in Chinese retaliating on US imports into China to an extent of $ 60 bn.

If this is not enough, an almost full employment situation with adequate higher inflation is forcing the US Federal Reserve to hike interest rates. As a result, the 10-year UST yield has surpassed 3% and even short-term yield like two-year UST is almost in the touching distance of 3%. The dollar index thus has been hovering around 95 pivots, putting immense pressure on EM economies.

Fragile five encores? During the height of uncertainty following US Fed’s decision to withdraw stimulus, way back in 2013 (in popular parlance, it’s mentioned as Taper Tantrum), Morgan Stanley had coined a new acronym, the fragile five which had Brazil, Indonesia, India, South Africa and Turkey as it’s members. The common thread that ran among all these nations were that all of them ran twin deficits and all of the members were dependent on foreign borrowings. If things were bad then for these “fragile five”, things haven’t been too great for these countries even today.

In fact, there are more in this club now including Argentina and other Economies suffering from CAD of various degrees. Among all, India perhaps is much more stable in terms of depth of the market, savings and consumer profile. But, the uncertainty caused by the US protectionism backed with high US interest rates, high global oil prices and lower capital flows, have hastened the fall of the rupee against dollar in the recent past. The rupee not only surpassed the earlier ‘taper tantrum’ low of 68.8500 with a great degree by touching a low of 73.0000 against $ but also has earned the notoriety of depreciating more in percentage terms among all Asian nations.

The million dollar question is thus, whether this is the end of rupee depreciation or is it still the beginning of a long journey ahead? The answer is not simple but the prognosis is not so bad either. Given the uncertainties overseas and local dynamics, the dollar-rupee pair is going to remain volatile. Obviously, 73.0000 will provide great resistance in the short-term but I don’t rule out further rupee depreciation. Hence, it might make sense to cover short-term “payables” to remain safe rather than be sorry forever.

By, Bhaskar Panda
(The writer is senior regional head-treasury advisory group, HDFC Bank)

Source: DNA Money

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Federal Reserve
RELATED NEWS
Fed policymakers double down on vow to keep interest rates near zero Fed policymakers double down on vow to keep interest rates near zero
Fed's Powell says central bank committed to using all tools to help recovery Fed's Powell says central bank committed to using all tools to help recovery
Fed touts economic recovery, vows to keep interest rates low Fed touts economic recovery, vows to keep interest rates low
Mask-wearing key to US economic recovery: Fed official Mask-wearing key to US economic recovery: Fed official
Fed adds Apple, Anheuser-Busch, Expedia to its bond holdings Fed adds Apple, Anheuser-Busch, Expedia to its bond holdings

LATEST NEWS

MCD by election 2021: FINAL RESULT of Delhi municipal bypolls! Full list of Kalyanpuri, Rohin-C, Trilokpuri, Shalimar Bagh North wards, seats - AAP vs BJP vs Congress

In chat with Anil Singhvi, analyst Vikas Sethi picks Phillips Carbon, L and T Finance as top buys for big gains

7th Pay Commission latest news today: DA hike, DR benefit, arrears, ease in LTC — updates that central government employees just cannot miss

PUBG Update: PUBG New State game may launch in India? Details here

Renault begins commercial sales of SUV Kiger; delivers over 1,100 units on first day

PUBG New State: PUBG game developers preparing for 'exclusive' content | Check pre-register details, official trailer and more

Lexus drives in LC 500h limited-edition with price starting at Rs 2.15 cr

UP Gram Panchayat Election 2021 Reservation List Latest News Today: Check pradhan seat aarakshan details here

Bonanza Portfolio highlights trading strategy in Big Bulls Rakesh Jhunjhunwala recent pick during Covid Lockdown

SBI account holder? Don't do this, or you will lose money; Bank issues WARNING - check 3 top tips

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved