Aqeel Karim Dhedhi says that the rupee had attained equilibrium, “I am confident that the currency will not devalue anymore.”
Taking to World News Observer, AKD said there was hardly any chance of interest rate going up any further.
However, he said rates of gas and electricity could increase as the impact of devaluation had not been passed on fully.
“Rupee had gone through a depreciation spree followed by subsequent rounds of depreciation, but the current government has to pass on the impact.”
whenever interest rates were increased economy slowed down
He said the situation is favourable. Commenting on the impression that IMF would impose strict conditions resulting in tough times ahead, AKD said whenever interest rates were increased economy slowed down. Rates have been increased from 6.75% to 10.75%.
AKD said IMF could not dictate any more conditions as fundamentals are improving with measures in place, while the currency is not over-valued and it’s impact is passed on.
AKD observed that there could be increase in inflation and slow growth initially, but things would reverse soon
IMF could not dictate any more conditions as fundamentals are improving with measures in place
“There has been enough rains this year and high agriculture growth is expected due to availability of water”.
Talking about decline in stock market, the guru said market had adjusted as the valuations are directly linked with the interest rates.
Brokers were availing financing at 7.0% when policy rates were 6.75%, now with policy rate at 10.75% they are borrowing at 12-13%.
Moreover, several sectors such as steel, cement and power generation are in surplus capacity creating a supply glut.
Brokers were availing financing at 7.0% when policy rates were 6.75%, now with policy rate at 10.75% they are borrowing at 12-13%
He said several issues such as capacity payments to power producers etc. needed to be fixed while there should be a planned and well coordinated industrial growth.
He said the encouraging thing is that the trade deficit and current account deficit are shrinking, which would support economic growth.
“Shrinking TD and CAD will support economic growth”
“Stock market is quite attractive at this point of time,” AKD said urging masses to invest in stock market, which is a productive investment and offers better returns.