Posted in Community :
Capital Markets
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Activity:
12 views;
last activity : 07 06 2010 20:18:09 +0000
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Dollar vs Rupee
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Banking system
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Ineffective system
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Capital Squeeze
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Dollar sales by the central bank to stem the
rupee's slide following strong foreign fund outflows from the battered stock
market. This is a very formidable sign when it comes to the economy of a
country like
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No supporting Arguments for this idea
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I think the main reason for this is tax payments
by corporates shifted funds out of the system and into the government's
account. Planned government spending had also not materialized, and this
usually passes into the banking system helping cash levels. This has seriously
affected the liquidity levels in the banking system.
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No supporting Arguments for this idea
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The ineffective public system has resulted in unscheduled borrowing by the
government. This in turn has fueled the rate of financial deepening. Another reason for this is risk aversion of
financial intermediaries to lend, particularly to mutual funds facing
redemption pressures. |
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No supporting Arguments for this idea
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There is a capital squeeze all over, for those looking to raise capital, the alternative
of funding through fresh equity is not cheap either, since stock
valuations have suffered in the wake of the FII pull-out. In short,
capital has suddenly become more expensive than a few months ago and,
in many cases, it may not be available at all.
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No supporting Arguments for this idea
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