Article;
Rupee seen moving towards 66-67 over the next 3-5 weeks.
Comment;
We can not be sure
about the rupee reaching 66-67 because Dr Raghuram has increased repo-rates and
reduced MSF and CRR. We have a mixed reaction... In the first instance
(repo-rates) money supply is going down and in the latter two (MSF and CRR)
money supply is going up. Therefore it is upto the market to decide what the
exchange rate will be... Higher repo-rates will also attract foreign inflows in
search of higher yields which the QE will well provide... The chances are that
foreign exchange rate will appreciate more than a depreciation because the
inflow of foreign capital will keep exchange-rate less volatile and strong...
.
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