Rupee appreciation to stop here!!

1. Broadly because the exports and services sector have already been hit badly by the onslaught of rupee appreciating close to 12-13% year on year.
2.This year is an election year with the polls looming large prior to Nov 2008 and the government cannot afford to have interest rates at high levels which might alienate middle and lower class vote banks
3. Inspite of the Interest Rate Differentials between US And India we havent seen significant inflows from FII's even after a number of fed rate cuts
4. Yen has started to appreciate against Dollar and all other major currencies of the globe and this is going to result in major Yen carry trade unwinding which will only put pressure on the rupee to decline