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RBI should not hike rates tomorrow

Is RBI that important to the forex markets?

 

Indian Rupee at all time Low of Rs. 53.51/$. It is believed that RBI intervenes currency market to suppress Rupee if REER index approaches 105 & props Rupee up if REER gets close to 95. REER above 100 indicates relative strength of the currency. REER levels as on 25 Aug 2011 was of 117.01 implies that rupee is weaker compared with the base year of 2004-05.

http://bhavikkshah.blogspot.com/2011/11/dollar-rupee-story.html

In 1973, Gold held by US central bank was 8,584 tones & currency in circulation was $61 billion. Dividing the gold held by the currency in circulation, we get a ratio of 140.2 for that year. i.e. 140.2 tones of gold were held per $1 billion of currency in circulation. In the year 2007, US central bank held 8,133 tons of Gold & the money in circulation was whopping $759 billion. The ratio comes to 10.7 .i.e. only 10.7 tons of gold held per billion dollars in circulation. If the US were to get back to the 1973 ratio of gold held per billion $ in circulation, it would have to increase its Gold Reserve to whopping 1,07,153 tons from current 8,133 tons, an increase of more than 13 times in potential demand. With the financial crisis not over yet, Central Banks like FED would continue to inject more & more money into the financial system. Thus the debasement of currency will continue, making real asset like GOLD & SILVER more & more attractive as a hedge against reducing purchasing power & loss of faith & confidence in paper currencies. We should thank GOD that US does not have a printing press for Gold. The YELLOW metal may be the only Savior of our wealth over longer term. That sure makes a case to buy GOLD. As far as our INIDA is concern, India M3 supply as on July 16 2010 was...READ HERE FOR MORE -

http://bhavikkshah.blogspot.com/2010/06/one-should-always-buy-gold.html

   

 

i thing rbi will hike price 

 

Indian market is likely to gain from current levels

the growth right now is constrained by global headwinds. " I think earnings growth has been quite strong for Indian companies," he said.

According to me the peaking of interest rate cycle is going to be the next trigger for the market. " I think the Reserve Bank of India should not  hike rates tomorrow"