Forex replied on Thursday, December 1, 2011 03:52 PM
On the contrary, I fear most about the balance of payment crises as the one we faced in 2008. First three months of the financial year have seen consistent current account deficits; infact, first 3 months have breached the target fixed for the year.
Our imports are mostly essential; oil, edible oil, fertilizer, tea etc meaning thereby that these are relatively inelastic. Exports have never kept pace because of various inefficiencies and now major component, cotton based products' prices are down globally. Remittances are a silver lining though crossing 1 billion $ per month.
IMF payments start in Feb 2012 with 1.2 billion $ tranche that we may be able to pay from our reverses, though beyond June 2012, we don't have forex to pay for 3 billion $s to be payed in FY 2012. All that we can hope is to get more loan to payback IMF and markets are starting to sense that right now, which is the reason that $ is appreciating. India is also facing a similar kind of problem though India is in a much better position because of its export mix, reserve composition, quality etc. |
