Investment Valuation in India

The Reserve Bank of India has announced that starting it will withdraw all notes that were printed before 2005. Starting 1 st April 2014, the all banks will exchange old notes with new ones. One has to present all old notes to banks and they will be provided with new ones. Starting July 2014, anyone exchanging more than 10 notes of Rs 500 or Rs 1000 will have to present their ID proof. How to identify which notes were printed before 2005? All notes printed before 2005 did not have the year of printing on them. Starting 2005, all notes have the year printed on the back side at the bottom. The move is aimed at reducing fake notes from circulation. However, it was clarified by RBI Governor R Rajan that the pre-2005 notes will continue to be legal tender. This has created further confusion among people as to whether they should actually replace the notes or not. Impact of Currency Recall The currency recall announcement has a huge impact as this would cap...

The US Economy is weakening, why is Rupee depreciating (as compared to dollar) then? The rupee slumped to a five-year low of 47.10 in spite of the slowdown in the US Economy. Ideally when a country is in the slowdown the currency of that country should depreciate. Fine that India is slowing down too but is still growing at a rate more than the US. But why is the Rupee depreciating then. There is heavy dollar-demand from oil refiners and importers. Sentiment for the local currency was further dampened by losses on the stock markets on Monday (29-Sep-08). But the central bank intervened by selling up to $1 billion which helped prop up the rupee. We have the inflation climbing the ladder very fast with remote signs of coming down. The crude oil prices are extremely volatile. The GDP forecast is also trimmed every now and then. The current account deficit is widening. With not many positives in sight, traders see the rupee trading in the 47-per dollar range for the next few days. At the cu...