RBI - please beware that - trend is your best friend!!

As the Indian Rupee fell, bankers reportedly spotted the RBI  trying to keep the rupee safe from the dollar optimists . The Central Government seems keen to project a strong if not stronger rupee. RBI, more experienced in selling dollars , knows that sentiments alone cannot run an intervention policy. The trend is your best friend and contrarians have limitations. So RBI may only make token purchases. The big worry is when Fed really starts moving up the rates. So RBI will preserve its limited ammunition and wait for the big run. So until then, the Rupee looks set to be in line with  the market trend. For tonight, Fed may not so much go in for an upward rate hike. RBI senses that perhaps.

Management lesson: Do not try to challenge the market. Remember Bank of England and remember Soros!!! Recall Russian Central Bank's misadventure yesterday.