India: short term effects of rupee demonetisation could hit outbound market

On November 8, the government announced that the ₹500 and ₹1,000 notes – the two largest value bank notes in the currency – will no longer be legal tender, with almost immediate effect. “Eventually it’s going to be more positive. On the shorter term it’s going to be a little bit negative” The decision was made by Prime Minister Narendra Modi with the aim of ridding the country’s economy of ‘black money’, counterfeit notes, and corruption. A new ₹500 note and a ₹2,000 note will be introduced into circulation soon. India…

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Falling rupee to boost earnings of TCS, Infosys and other IT companies

The rupee’s sudden fall in the past few days may prove to be an added advantage for software exporters who are betting big on the improving outsourcing demand in the US and Europe. The rupee traded at 65 per US dollar on Friday. This is 2.5% depreciation from the average rupee level of 63.4 at the end of the June 2015 quarter. Industry trackers point out that every 1% fall in the rupee may improve operating margin of software exporters by 30-50 bps. Indian IT exporters are witnessing a strong…

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