After creating nerves for Indian exporters, especially the IT companies, the rupee finally touched a month low by falling 43 paisa to close at 41.13 (it touched an intraday high of 41.18) on 8 June. It has dipped 90 paisa to the week’s high of 40.28 (also a 9 year high) during the week and might be a signal to the start of the downward cycle.
Another good news for Indian corporates was the 6th consecutive fall in weekly inflation figures to reach below RBI’s target of 5%, thus mitigating the need to increase interest rates. The inflation for the week ending May 26, 2007, was at an 8-month low of 4.85%.
The Indian rupee is close to its 9 year high against US Dollar, and scores of news has been written about it in the pink newspapers and business channels. They are mostly sympathic towards the Indian IT companies and how they has been adversely affected by its fall (1% of rupee apprecation means 0.75% fall in earnings).
