Indian Rupee Rate (INR) Indian Rupee Forecast
Morning Briefing

Rupee Update - 23 Jun 1998

Potatoes and Onions
In "The Colour of Money" dated 15th February, 1998, we had said that "...the RBI possibly believes that fluctuations in the price of potatoes and onions are seriously damaging to the health of the economy".

The Economic Times reports that the Finance Minister yesterday said, "...Now, should we link national honour with the price of rupee? Should we link national honour with the price of potatoes and onions?" We laud his statement, an unexpected flash of maturity.

Let the market take the Rupee to 43.00-43.20-43.50-44.00. We think these are all levels to sell the Dollar.


Movement in $-Re from



Projection from 35.70 (Aug '97)

1995 - 6th February, 1996

31.37 to 37.65



1995 - 6th February, 1996

31.37 to 38.35 (intraday high)



We have heard the following respectable forecasts (not the 50-60-70 variety):

September 1998 44.00
March 1999 45.00

Forward Rates available at 11.30 am on 23/6/98 (working off a Spot of 42.90)

September 1998 44.35
December 1998 45.65
March 1999 46.90

Implication: Taking available forecasts into account, it makes more sense for Exporters to sell Dollars than for Importers to buy them.

If anyone had sold Dollars 5 months forward (to coincide with current date) at the high of 16th January, 1998, he would have got the following rates:

Spot 40.37
Premium 2.56
Forward 42.93

Implication:The Dollar seller of 16th January has not lost by selling Dollars.

Sell Dollars from now (42.90) upto 44.00. Do not buy

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