Arjun Parthasarathy has spent 20 years in the financial markets, having worked with Indian and multinational organisations. His last job was as head of fixed income at a mutual fund. An MBA from the University of Hull, he has managed portfolios independently and is currently the editor of www.investorsareidiots.com . The website is for investors who want to invest in the right financial products at the right time.
Dr. Rajan please do advice the policy makers not to run after USD flows into domestic debt. The country requires a much freer movement of capital for that and the INR is still not fully capital account convertible. India also lacks the maturity to handle negative flows and negative flows will happen many times going forward. #CAD#India#Indian Markets#Indian rupee#Raghuram Rajan#UPA#WhyNow
RBI in managing INR volatility will also have to keep a watch on the system liquidity given that it is still in deficit by around Rs 75,000 crore. Hence a focus on INR and liquidity takes attention away from economic growth.
China slowdown is good for lowering inflation expectations as commodity prices are kept down while Bank of Japan will double its monetary base over the next two years. Emerging markets including Indian markets should stabilize and look to strengthen going forward. #Currency#Emerging markets#equities#Rupee#stocks#US
The reasons for the INR fall are more to do with broad USD strength globally than any real domestic worries but the fact is that the RBI views a weak INR as a threat to the economy. #Bonds#PolicyWatch#Rate cut#RBI#Rupee
The arbitrage for FIIs is the rising yield curve prospects in the US and falling yield curve prospects in India. FIIs will invest in INR bonds to take advantage of this fundamental arbitrage. #Bonds#Debt#FII#India#Stock market