I was doing some back-of-the-hand calculations on what could be a stable value of the US$-INR exchange rate.
I would not be surprised if it goes as low INR 74 to 1 US$. The reason for this is the falling value of Rupee in the last 9 years. Using the inflation figures of India and US, I find that the value of Rupee has depreciated by about 50% in this period where as that of US$ has depreciated by about 20%. In Aug 2004 the exchange rate was around INR 46 to 1 US$. This implies the current exchange rate should be around 46 x 0.8 x 2 = 73.6 i.e. around INR 74 to 1 US$. Since the current rates are hovering around INR 69 to 1 US $ I expect this to dip further in the coming weeks.
I would not be surprised if it goes as low INR 74 to 1 US$. The reason for this is the falling value of Rupee in the last 9 years. Using the inflation figures of India and US, I find that the value of Rupee has depreciated by about 50% in this period where as that of US$ has depreciated by about 20%. In Aug 2004 the exchange rate was around INR 46 to 1 US$. This implies the current exchange rate should be around 46 x 0.8 x 2 = 73.6 i.e. around INR 74 to 1 US$. Since the current rates are hovering around INR 69 to 1 US $ I expect this to dip further in the coming weeks.
