a)
- Rupee is likely to weaken in FY10.While currently running at 48-50 to the dollar , the rupee is likely to hit Rs56-58 by the end of FY10.
- Comapnies foreign liablities will haunt them in FY10 hurting their profitablity.Higher debt servicing means higher costs and lower profits ; for companies with positions in currency derivatives (not yet unwound), it will mean losses .Most had hedged the currrency at 42-45 to the dollar .
- Rupees value is exclusively measured by the Foreign ecxchange reserves with the RBI.
- A weak rupee will not attract capital investment in FY10.(lets see?)
- Capital flight throught portfolio outflows would continue .
- All forms of supplier credit likely to dry up.
- Dollar demand from both importers and exporters would continue to rise.
