The other emerging market currencies experienced a more pronounced depreciation against the dollar than the rupee in 2024, resulting in a relative appreciation effect.
Both the government and the RBI are currently so focused on their respective targets that they are losing sight of the fact that some flexibility might actually be a good thing.
ThePrint analysed exchange rate & trade data from April 2012 to September 2022, which shows there’s little relation between the rupee movement and performance of exports.
The rupee dropped to a record low of 82.6825 on Monday, but has managed to recover slightly, thanks to likely intervention by the Reserve Bank of India, which offset trading volatility.
With US Fed hiking rates, RBI might be pushed to increase its own rates to slow simultaneous fall of rupee & India's forex reserves. But this could also hurt economic growth.
IMF’s World Economic Outlook has flagged concerns about a global recession. This should worry US & advanced economies but probability of recession in India seems low.
While RBI move to allow export/import to be invoiced in Indian rupee will solve some problems, there is no guarantee it will circumvent payment issues with Iran or Russia.
In conversation with ThePrint Editor-In-Chief Shekhar Gupta & Senior Associate Editor Manasi Phadke at Off The Cuff, MD & CEO of Centre for Monitoring...
What ‘strong currency’ policy framers ignore is that almost every nation with a successful long-term record of development has pursued a ‘weak currency’ policy to win export markets.
Instead of buying more Mirages outright in early 2000s, the requirement was tweaked in favour of a medium-weight, multi-role fighter with Mirage-like performance.
Pakistan not only has zero chance of catching up with India in most areas, but will inevitably see the gap rising. Its leaders will offer its people the same snake oil in different bottles.
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