## Monday, September 01, 2008

I wrote a column in Financial Express today about the task at RBI.

1. If GoI were a client, and RBI its hedge fund manager, both would have been mightily pleased with the latter's performance over the last eight months.

As its main task of intervening in the currency market, the RBI purchased dollars from the market during most of FY08 and a couple months in FY09. Btwn july'07 and May'08, it made dollar purchases amounting to 69-70 bln dollars at an average rate of Rs.39.8 to the dollar. And now since the past four months, its selling dollars left right and centre.

Recent data indicates that the RBI sold dollars during June and July'0 at an avg. rate of Rs.42.8 to the dollar, raking in a nice profit of close to Rs.4000 crore.

Ofcourse, the real profits wud've accrued in the months of Aug and Sep during which the Rupee depreciated beyond Rs.45 to the dollar. Assuming, the RBI sold 10 bln dollars each during Aug and Sep, we are looking at another 12-15,000 crore. And, more importantly, if it were to continue for another 2-3 months, the profits from currency mkt operations may easily cross Rs.40-50,000 crore.

LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.