New Delhi: The rupee has been powering ahead. CNBC-TV18 reports on how flows have dictated the rupee’s movement, since the start of the bull-run, in 2003. The question is whether it can head to the 37 or 38 mark.
Analysts said that at the beginning of the bull-run, there has been a huge inflow of capital. The rupee appreciated 17% since 2003. It has come back in focus, as the rupee reached a crucial 40 mark yesterday. There has been a huge amount of inflows, especially in the last two days.
In 2003, we saw USD 6.6 billion inflow of cash and the rupee appreciated by 5%. In 2004, where there was a USD 8.5 billion inflow of cash, the rupee appreciated by 4%. However, in 2005, when there was a USD 10.7 billion of cash, the rupee depreciated by 3.4%. But then from 2006 and 2007 onwards, it has been a dream run for the rupee.
This year was extremely special, as the rupee appreciated by about 9.6 %. We have seen an inflow of USD 10.4 billion in cash, which includes yesterday’s provisional figure and after that, the major sell off of about USD 1.9 billion of cash in August. Till date, the rupee has appreciated 3.1%. We have seen USD 2 billion inflow in cash and USD 1.7 billion inflow in the F&O space.
In the last few days, after the Fed cut rates, we have seen over a billion dollar flows in cash and over a billion and a half dollar inflows in the F&O space. That makes a total of a two billion dollar inflows in the last few days itself. The rupee has appreciated 1.7% in a mere two days.
Analysts believe that the brokerage target of 37- 38 may not seem so far fetched after all and we may be seeing these numbers pretty soon.
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