Last Month Rupee registered its best Monthly gain in 17 years. Rupee has appreciated 7% in One Month after depreciating 16% in the year 2011. It has come down from 53.31 levels to an unexpected level of 49.45 during January 2012. Even in the first few days of February 2012 it is marching ahead and has given surprise to every one. There are several reason for the appreciation of Rupee. The prime reason is huge US$ inflow to India brought in by the FIIs. India has already seen net inflow of US$5 Billion in one Month. The way inflation is cooling down and the indication given by RBI for lowering interest rate more Funds will flow to India making INR stronger in the coming Months. The other reason for INR appreciation is the initiative taken by Central Government and RBI during December and January Month. RBI has issued guidelines for curbing speculation in INR/USD which has worked to some extend. The interest rate liberalization for the NRE account is also driving NRI to bring home more Money. But the Rupee appreciation may see some temporary hurdle due to two immediate factors. First one is the outcome of State election and the second one is the content of Union Budget in March 2012 . Everyone has discounted that present Government at center will get positive support and likely to be stronger after the state Election result and motivate Government to announce some bold pending policy decision in Budget. Any negative factor in these two event will see Rupee depreciation in the short run but in the long run INR will appreciate by end of 2012.
No comments:
Post a Comment