Finance, Forex and Investments

is there any way for me, with my US dollars, to take advantage of India's rapidly appreciating rupee?

In the past 40 months the Indian rupee has appreciated more 25% against the US dollar. The exchange rate has gone from 51 rupees to the dollar to a mere 40.6 rupees to the dollar. And financial experts expect the trend to continue, with the rupee perhaps reaching 30 rupees to the dollar by 2010. How can I, an American with my money stuck in dollars, take advantage of the Indian rupee's remarkable growth? Should I change all my money to rupees? Should I invest in the Indian stock market? Buy Indian bonds? If I keep my money in dollars, then the value of my money is going to keep going down relative to the rupee. But if I change it to rupees now, before the dollar drops even more, then my money will stay safe, or grow stronger, right? PS I should add that I plan on living and working in India for at least several years in the near future and maybe forever.

Public Comments

1. Get into FOREX trading.
2. There are lot's of ways. Obviously, emptying your savings account of dollars and buying rupees would work. Even better would be open a rupee denominated savings account (presumably with an Indian bank), then you would get the appreciation in the currency, plus interest. Indian bonds would have the same advantage. But probably the easiest would be to find a successful Indian company that is listed on an American exchange, and buy the stock (or American Depositary Receipt, which is just a stock that holds other shares of foreign stock). I would hazard a guess that either Tata or InfoSys has ADRs.
3. Well, do you beileve me about my cousin, or not? :D
4. I put out a long term dividend adjusted chart for IIF (India closed end fund) for you at http://www.fasttrack.net/answers/iif.gif It shows 1147% gain since August 1998. However, the past year is down. While India has a great future, to buy Indian assets now would be to buy at extreme nose-bleed values. It is possible that your investment would not grow for many years . . . even lose 30-40% over the next 2-3 years. In brief, you are 9-years too late to the party.
5. Because Indian regulations make it very difficult for the US Retail Investors(us) to make investments directly in the local securities market, access to this market has generally been limited to U.S institutions. Operational, regulatory, and tax challenges associated with the Indian market prevent easy access to all but the largest and most experienced investors. So therefore, I think you should look at their total return broad based index, from Barclays, Ipath MSCI India Index. The ticker symbol is INP. It trades like a stock(exchange traded fund) and is liquid. I attached an informative video from Barclay's top Former Financial Analyst covering India, so you may learn the positives/negatives of investing in India right now. Good luck.