Factors which can lead the Rupee appreciation
· Base rate effect to kick in and the inflation numbers will go down and will be very much within the magic figure of 6
· Reversal in interest rate cycle
· Increase in corporate confidence & profitability
· FII money flows into the country
· Hike in NRI deposit rates will also help in money flowing into the country due to arbitrage opportunity
· Allowing Qualified Foreign Investors (QFI) to invest directly will allow money to move into the country.
· US economy showing sign of improvement to help local market sentiments. This will again be positive to move in money to India.
All these factors can lead the Rupee to appreciate and move away from 53 to below 50.
Factors which can hinder the Rupee appreciation
· Sovereign debt situation worsening in Europe.
The best option today for NRI investors is to take advantage of the depreciated rupee and move into the country. For every dollar today they get more rupees and once in the country then can look at options of investing into equity at the present market level if your Profile allows else look at investing into debt funds especially on the Income fund side and easily you can look at a yield of 8-9%.