India today asked the International Monetary Fund

Sridhar Krishnaswami Washington, Oct 11 (PTI) India today asked the International Monetary Fund to be prepared to meet the borrowing needs of countries engulfed by the global financial crisis, warning that failure to address liquidity concerns may further risk the financial system's stability."The financial institution (IMF) should have the mending instruments and the financing capacity to address potential borrowing needs," according to Finance Minister P Chidambaram, whose speech was read out in absentia by Reserve Bank of India Governor D Subbarao at the International Monetary and Finance Committee's meeting here.Subbarao was representing Chidambaram, who cancelled his visit to assuage fears at home about the global financial storm hitting the Indian shores.Noting that there were a number of concerns over the attempts to resolve the current crisis spawned by defunct mortgages in the US, India suggested that IMF take up the role of an orchestra conductor so that fragmented efforts at different levels be organised for more effective results.Besides, India wanted the stigma attached to Fund lending to be tackled to reduce recourse to alternatives. "Countries have to be encouraged to approach the Fund in the incipient stages of a crisis," India maintained.Although according to Chidambaram emerging market economies were relatively safer, he felt their growth would nevertheless be affected and would slow to 6.9 per cent in 2008 and further to 6.1 per cent in 2009."The risks for these base line scenarios are clearly tilted downwards," he said, pointing that inflation could, however, moderate mildly due to the recessionary conditions in some parts of the world and some moderation in commodity prices. PTI more details http://www.marketmantra.in/

Rupee recovers from early losses

MUMBAI: After plunging to a historic level of 49.30, the Indian currency recovered to 48.45/46 against the dollar at the end of the session on Friday.
In a wild movement at the inter-bank foreign exchange market, the rupee lost further ground against its Wednesday’s close of 47.99/48 and quoted at 49.30 at one stage. However it recovered part of its losses to end the day at 48.45/46, still lower by 46 paise. The rupee fell to historic level on mounting fears of heavy capital outflows after global credit crisis spread to Asia, forex dealers said. Turmoil in bourses and growing fears about a global recession caused worries that there would be heavy capital outflow from equity. — PTI http://marketmantra.in/Currency.asp

Indian rupee off from lifetime lows on cbank hand

MUMBAI, Oct 10 (Reuters) - The Indian rupee was hovering above lifetime lows on Friday buoyed by heavy dollar selling by the central bank.
* At 3:50 p.m. the partially convertible rupee was at 48.53/54 per dollar, weaker than 47.99/48.01 at close on Wednesday and above a lifetime low of 49.30 hit in early deals.
* The central bank is estimated to have sold about $1 billion so far in this session, helping the rupee recover from record lows of 49.30 reached earlier.
* India's main share index provisionally fell 6.99 percent on Friday as panicky investors joined a global sell-off with weak industrial output adding to the gloom. [.BO]. (Reporting by Saikat Chatterjee; Editing by Harish Nambiar)
source : reuters.com
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Indian rupee hits record low; cbank helps recovery

* Rupee bounces off lifetime lows, cbank seen intervening
* Near-term sentiment for rupee remains bearish
* Stocks fall 7 pct, raising concerns about further outflows (Updates to close)
By Swati Bhat
MUMBAI, Oct 10 (Reuters) - The Indian rupee bounced off a record low on Friday after the central bank sold dollars through state-run banks in an attempt to prevent the currency from further steep falls as the stock market dropped sharply.
The partially convertible rupee ended at 48.38/43 per dollar, 0.8 percent lower than 47.99/48.01 at close on Wednesday. Markets were closed on Thursday for a holiday.
The rupee fell to a lifetime low of 49.30 per dollar in early trade, after which traders said the central bank acted aggressively to support it, selling up to $2.5 billion.
"It is a very difficult market, very thin liquidity. The RBI has now provided rupee liquidity by the CRR cut, so they are likely to keep intervening in the forex market," a senior dealer with a private bank said.
The central bank's intervention has contributed to a squeeze on rupee liquidity in the domestic banking system that has pushed overnight cash rates to 19-month highs of 23 percent. The central bank on Friday said it would increase a previously announced 50 basis point cut the cash reserve ratio (CRR) to 150 basis points, effective from Oct. 11, saying the move would free up around 600 billion rupees.
"The rupee could head towards 50 per dollar within this month, with the only things barring it is some decline in risk aversion among investors and steady gains in the stock market for at least three to four days," the dealer said.
India's main share index tumbled 7.1 percent on Friday to post its biggest weekly fall in nearly 18 years as panicky investors joined a global selloff on recession worries, with weak industrial data adding to the gloom. See [.BO].
Foreign funds have so far sold a net $10.3 billion worth of Indian shares in 2008, after buying a record net $17.4 billion last year. (Editing by John Mair)
Sources : reuters.com

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