r2i and re/$ trend medium to long term

[pqr2012]

Disclaimer: Forex trends are extremely complicated and the
scenarios/models/assumptions that I use have too many
variables which can completely change. So
what I write here can even be 100% wrong in the long run. so you must
do your research and more importantly apply common sense.


There is a big possibility that Re may appreciate to around
56-58 Re per dollar in 10 years time. I am conservative and most likely appreciation will be more.


Main reasons for this:
1. Stead increase in FII and FDI over course of next 10 years.
2. Favorable macro conditions in Indian economy.
3. Off course RBI in short term wont allow significant appreciation
to keep export competitive. But if dollar flows increase
significantly no way it can keep Re at subdued level for long.
Also trying to keep Re devalued if there is deluge of FDI can
eventually stoke inflation. So RBI beyond certain point is completely helpless.
4. Given huge debt burden of US at some point dollar have to start falling.


A conservative 1-2% yearly Re appreciation is very much possible and most likely.
Fluctuations and volatility will be there I talk here about possible long term outlook.


A strong currency in the long run helps a country. I hope RBI doesn't make the mistake that China made by keeping currency low for decades.


Please note that if there is Re appreciation then FII will also increase in tandem which means the Indian equity market in such a scenario will significantly outperform its peers.


Indian economy will be best performing over next 1-2 decades. Already FDI is 60bil$ +.
I wont be surprised if FDI crosses 100bil+ over next few years.


Well run Indian corporation are sitting over mountain of cash. So growth momentum will only accelerate when private capex kicks in.




Indian GDP will clock 8% + growth soon and that will continue for many years to come.


For next 1-2 decades India is going to be the darling of entrepreneurs, investors, hedge funds
and pension funds.

So all potential r2i candidates keep the Indian macro in mind.

For an enterprising guy India will offer incredible opportunity in next 2 decades. That is a certainty.

[jazz100]

Any predictions about the trend with British pound?

[techynt]

I predict Re to depreciate every couple of years equal to the inflation differential between developed countries and India.

As of now the differential is around 3-6%. (guesstimate since real inflation numbers are hard to come by from all govts)

Me and some people I know can only dream for Re to go to 50, since we have significant amounts in Indian bank FDs and would love to get the bounce so that we can repatriate our money back.

[pqr2012]

jazz,

At this stage no one can say anything about UK or pound. Brexit if it happens (lets pray to God it doesn't) will
be probably the one of the most catastrophic financial event.

But even if Britain doesn't exit I really don't see how Britain can flourish in the days to come.

Particularly London as a financial hub will see enormous competition.

Understanding of Europe and China can help you make enormous wealth (think commodity, healthcare,tourism etc
related investments).
I have made some money but if I understand well surely I will make a fortune. But honestly
I know very very little. I wish I know at least a little bit more sooner than later for time is running
out fast.

[Desi]

A conservative 1-2% yearly Re appreciation is very much possible and most likely.
Fluctuations and volatility will be there I talk here about possible long term outlook.

Have heard this type of stuff for decades from different people. Report back in 2017 and we will see how your prediction holds.

[techynt]

I forgot to add:
1. USA FED is looking to raise rates and RBI is going to cut rates, bad for Re.
2. Higher economic growth usually means higher inflation, once again bad for Re.

I predict Re to depreciate every couple of years equal to the inflation differential between developed countries and India.

As of now the differential is around 3-6%. (guesstimate since real inflation numbers are hard to come by from all govts)

Me and some people I know can only dream for Re to go to 50, since we have significant amounts in Indian bank FDs and would love to get the bounce so that we can repatriate our money back.

[pqr2012]

Desi,

I accept the challenge. 2017 is not the right time frame(time frame too short).
Why not make it 07/06/2019. I will visit this thread on that date and we will see where
Re/$ stand on that date.

I predict 1$ in 61-64 Rs band around 07/06/2019. Peace.

[Desi]

Desi,

I accept the challenge. 2017 is not the right time frame(time frame too short).
Why not make it 07/06/2019. I will visit this thread on that date and we will see where
Re/$ stand on that date.

I predict 1$ in 61-64 Rs band around 07/06/2019. Peace.

What challenge? I said only that let us see if your prediction holds.

Sure, come back in 3 years and we will see if your prediction holds.

[honeyglue]

If I am not mistaken, pqr2012 assessment on China market held true which he predicted in Sep/Oct 2015 that China is looking scary and it did come crashing down during Dec. 2015/Jan 2016. That was very bold prediction and did come true to a large extent.

Looking at the growth rate predicted for India at 7.x %, while world economy not doing as well, it looks like rupee may appreciate, just a speculation! I laud pqr2010 for atleast doing the analysis and putting forth a bold thought.

[techynt]

For all those people so sure, here is the rupee market. You can make millions by using the futures market. Market is willing to bet with you that rupee will be around 73 by Mar 2018.

http://www.cmegroup.com/trading/fx/emerging-market/indian-rupee.html