Inference: Slip-narrative

The Indian currency, the rupee, is weakening day by day. On Monday, it had to pay Rs 77.49 per US dollar. This is the lowest level recorded by the currency exchange rate. Looking at the declining speed it is not surprising that it soon reached eighty. Many have argued that the strength of the US dollar was to blame for the rupee’s depreciation. No matter what the rupee says, if the rupee depreciates, it will hurt not only the country’s economy but also the pockets of the common man. This is a time when international prices of the country’s largest importer of mineral oil are skyrocketing. In fact, this is one of the reasons for the rupee’s fall, which has already led to rising oil imports, which in turn are becoming more dangerous. Inflation in the country has already crossed the 17-month high as a result of high imports. The current week’s April inflation figures are of further concern. According to the Wholesale Price Index (WPI), inflation was 6.95 per cent in March and 7.70 per cent in April. For the first time in almost four-and-a-half years, the Reserve Bank of India (RBI) has hastily decided to raise interest rates. The RBI should take the decision to hike the repo rate by a whopping 40 basis points as soon as possible. Today, the rupee is the fastest depreciating currency not only in Asia but also in developing countries. Its depreciation has been more than 18 percent over the past four years. The rupee depreciated by 18 per cent in July 1991 as a precautionary measure against the then financial crisis. But without devaluing, the rupee gradually rose to the eighties without reaping the economic benefits of that action. Those who say that the rupee is depreciating ‘as a result of global developments’ should take this into account. To this day, the depreciation of the rupee is seen as a failure of the government’s weak economic policy. Prime Minister Narendra Modi intensified this trend during the 2014 election campaign. Right now that comment seems to be reversing. With crude oil prices below 50 50 and the global economy recovering, exports have eased controls without focusing on growth. Furthermore, the hasty implementation of GST and Make in India has proven to be a source of instability for all industries during the harvest season. Later, the world of Corona was besieged and the crisis began. It is certainly not happy to say that the depreciation of the rupee will benefit exporters in our economy which is always heavier than imports. The diversion of foreign investors from India is more a sign of the country’s volatile present and future than a sign of capital market volatility. The economy is facing many challenges and the current government has no answer. It is futile to expect the rupee to gain a firm and solid footing in the ongoing recession in many parts of the economy.

2022-05-09 21:36:24

Exit mobile version