Rupee closes below 73

The rupee on Wednesday reverted to its old ways of sagging against dollar as rising crude prices pushed the currency below 73 mark for the first time.

The pressure on currency cannot be solely attributed to oil-the US Federal Reserve has raised its rates that has led to a dollar rally and outflows from emerging markets including India.

Foreign portfolio investors have already pulled out ,$9 billion from the equity and bond markets. Experts have forecast the country's CAD- difference between foreign exchange earned and spent - which hit 2.4 percent of GDP during the first quarter of this year is set to rise further because of crude.

Indian Rupee and Deficit

The continuing depreciation of the rupee and widening external deficit seems to have forced the finance minister and the reserve bank of india to wake up to the dangers confronting the India economy.
For developing country like India,  running high levels of external deficit inevitably leads to dwindling confidence in their currencies and capital flight.  Over the past two years the rupee which wad trading at around Rs 45 per dollar till August 2011, fell to Rs 55 per dollar by August 2012 and has further slid to Rs 64 per dollar in August 2013.
As per the international monetary funds projection India will need over $266 billion externalfinancing in 2013 to pay for its current account ddeficit and repay past debt.
What FM needs to do is :
Utilize the entire policy space available for import tariff hikes on non eseential commodities .
Impose strong and effective controls on the inflows and outflows of capital

Warning bell ignored by India, leads to weakening of Rupee

Viewing the India's current economic strata, its more likely that it will take much time for rupee to recover. Its main cause was and is ignored by its Govt. India's is on the second highest level after United States of America which is having high external deficit.
The Indian rupee touched record low of 65.52/dollar on Thursday and is down 16 percent so far this year despite efforts by policymakers to prop it up.
With rupee crisis, high inflation, budget deficit, foreign debt economist have started comparing it with the scenario of 1991 economic crisis.

OMG!!! Please save GOLD for me...

I was shocked after reading the first page of my newspaper. Gold has reached the mark of 32k :(
 the precious metal gained Rs. 320 to Rs. 32,300 per 10 gram in the Delhi market and has gained Rsthe precious metal gained Rs. 320 to Rs 32,300 per 10 gram in the Delhi market and has gained Rs. 1,555 in the last fortnight in the wake of continued uncertainty in Europe. In Mumbai, gold climbed up by Rs. 220 to end at Rs 31,700 per 10 gram from Wednesday's closing level of Rs. 31,480. In the international market, the yellow metal hit a six-month high of $1,701 an ounce, and is now twice as precious as it was in 2008, when the global financial crisis hit the economy. 1,555 in the last fortnight in the wake of continued uncertainty in Europe. In Mumbai, gold climbed up by Rs. 220 to end at Rs 31,700 per 10 gram from Wednesday's closing level of Rs 31,480. In the international market, the yellow metal hit a six-month high of $1,701 an ounce, and is now twice as precious as it was in 2008, when the global financial crisis hit the economy.
Sorry brokers for keeping this expectation that gold will come down to 28K as per my budget but it's not :( 
Now there is very strong possibility that it will shoot to 35K as well by the arrival of Hindu celebration Dhanteras. With the Rupee loss investors are making safe bet to Gold.