The Reserve Bank of India again intervened against the dollar last night, bringing the rupee off its historic low. The intervention, however, was dissimilar from previous moves as it took the form of restricting flow. According to The Hindu, the RBI took to, “ordering state-owned oil companies to purchase their dollar requirement from a single public sector bank for every [...]
Remember a few years back when the term decoupling was all the rage? Emerging markets and Europe were supposedly going to decouple from the US economy's troubles and continue growing while the US suffered through its real estate bubble collapse. Well that didn't work out so well with most every market in the world eventually succumbing to the undertow of [...]
The Reserve Bank of India was again spotted in the forex markets, as the rupee again nears its record low against the dollar. While India has myriad problems that add up to foreign exchange imbalances, there is pressure on the dollar as globally firms are finding them harder to come by. That rising dollar has far-reaching implications across already-stressed markets [...]
Our thoughts on the BRICs as they navigate some difficult circumstances have been focused on the efforts of central banks. The more desperate the measures they employ to “defend” their currencies, the more trouble exists and the greater the potential for further “tail risk”. That includes major imbalances spilling into seemingly unrelated markets. Last week, the Banco Central do Brasil [...]
Interest rates, as measured by the 10 year Treasury note, are up roughly 100 basis points (1%) from the low yields set last year of about 1.4%. That has everyone and his brother calling for the end of the great bond bull market that has been going on all my adult life. The 10 year Treasury note peaked in yield [...]
It isn’t exactly the Thai baht, but the dong was slightly devalued yesterday. Vietnam reduced its reference rate by about 1% (the reference rate is the midpoint in a currency corridor for the dong/dollar exchange value). Vietnam devalued by about 8.5% early in 2011, so it doesn’t seem to be much of a move in comparison. But the dong follows [...]
While currency temptations run high in countries with more active central banks, there has been, as I noted yesterday, growing illegitimacy in trying to create academic conditions in the real world. The primary manifestation of the instability created by believing currencies can and should be actively managed has been an outbreak of “inflation”. I use quotes here because rising general [...]
Stay In Touch