Not optimistic about Indian economy & rupee: Jim Rogers

NEW DELHI: Expressing concern over the outlook of the Indian economy, Jim Rogers of Rogers Holdings told ET Now that he was not optimistic about both the rupee and the economy going forward.

According to Jim Rogers, the government had always overregulated the Indian agricultural market and that serves as a big deterrent for the growth of the farmers. He is of the view that agricultural economies will outperform in the long-run.

Stating that known oil reserves are declining sharply, Rogers said that not only will crude oil prices remain high, they will also rise sharply in the next decade.

On similar lines, Nirmal Jain of IIFL said that high crude prices and a weak rupee are concerns weighing on markets. Like Rogers, Jain too was not optimistic about the Rupee and said that the Indian currency may hit 55 to USD this year.

With the rupee fast losing value against the US dollar, Finance Minister Pranab Mukherjee on Friday blamed volatility in global commodity prices for currency depreciation and said deteriorating balance of payment (BoP) situation in several Asian countries also put stress on currencies.

Most analysts expect the rupee to remain weak in the short to medium term, with some expecting it to fall to 55-56 levels vs the dollar.

"We all know the current account deficit problem, the trade deficit problem. Even seasonality is bad during this period of the year and we need FII flows, but FII flows have dried down over the past month. So that is putting the rupee under pressure," said Vivek Rajpal, Rates Strategist, Nomura India.

"If the RBI intervenes at correct levels in the right amount, we may hold the previous highs that we saw. Otherwise without the RBI intervention and without FII flows, the rupee may continue to remain under pressure," he added.

Asked about his outlook for commodities, Rogers told ET Now that they are in a long-term bull run. He also said that he will invest in well managed commodity economies.

Jim Rogers dismissed the central banks move all around the world to inject liquidity into the system. Rogers is of the view that both the European Union and the US economy are not managing their debt problems well. Artificial liquidity created by printing money will not help solve the issues haunting the Western economies, he opined.