Can India re-Value the Rupee?

Div
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Re: Can India re-Value the Rupee?

Post by Div »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr><p>So who's printing the paise so happily with no control? <p><hr></blockquote><p>You cannot rely on the government's self control to maintain the value of a currency.
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Re: Can India re-Value the Rupee?

Post by Rahul Mehta »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>narayanan says: Ouch!! That COULD be a problem, come to think of it - govt. spends 88 paise for every 44 paise that comes in taxes. <p>So who's printing the paise so happily with no control? <hr></blockquote><p>
Following are the reasons why money supply keeps increasing<p>1)RBI charges interest on the money it prints and some 80% of money is created by commercial banks by issuing loans. (90% is assuming CRR of 10%, and assuming that half the notes printed will be with public and not in bank. This is the case in India)<p>2)The deficit in budget.<p>3)Non Performing Assets of Banks : eg when Madhopura collapsed, its deposits were Rs 1200 crores. That means some Rs 1200 crores were deposited in the banks by the depositers. Now it had issued the loans of alomost the same amount and most of it went into shares and land. Both share market and real estate collapsed and so Madhopura's collaterals were worth less than Rs 400 crore. Now depositors will be paid back the full amount. What does this mean? Someone will have to bear the burden of Rs 800 crore. In general, eventually the burden falls on govt by one way or another. Such burdends are often financed by taxes or issuing more money.<p>The First factor needs more details explanation.<p>CaseI: Consider the case if India has ONLY one bank, RBI. Say there is no SBI, Bank-of-Baroda etc.<p>Now say there is zero cash and trade goes by barter. Say GoI decides to issue notes of Rs 1000. Now RBI will issue notes ONLY after GoI gives interest-bearing bonds worth Rs 1000. Say the interest is 10%, and bonds are to mature at the end of 1 year.<p>What does this mean?
1)There was no cash in round-1.
2)RBI issued notes worth Rs 1000
3)GoI promised to pay Rs 1100 of notes at the end of one year.<p>Now there is no way GoI can repay Rs. 1100 worth notes as ONLY notes worth Rs 1000 were issued to begin with.<p>Also, what it is interesting is that if GoI repays ALL its debt, the currency will vanish !!! I am serious, no jokes.<p>Case II: Consider RBI along with commercial banks.<p>Lets say RBI issued notes worth Rs 1000. GoI pays that money as salary to the employees who deposit in various banks. <p>Now these banks can create Rs 10,000 of check-book money by issuing loans, assuming CRR of 10%.<p>Now say the interest is once again 10%. <p>In that case, we have following situation:<p>1)There was zero money in the begining- Jan
2)GoI pledged (by issuing bond) that it will pay Rs 1100 of notes after 12 months
3)Against that pledge, RBI issues Rs 1000 of notes
(So there is no way GoI can repay the debt)<p>4)The commercial banks using this Rs 1000 as cash-reserve, created Rs 10,000 of checkbook money
5)The borrowers pledges to repay Rs 11,000 of check book money or notes.<p>So total money = Rs 1000 + Rs 10,000 = Rs 11,000
Total Debt = Rs 1100 + Rs 11,000 = Rs 12,100<p>ce, there is NO way borrowers can repay the money. Unless money supply increase next year.<p>SUmmary :
1)when banks create money, they ONLY create money in form on loan/debt. i.e unless someone is willing to take a loan, today's banks will NOT create money. <p>2)And when a loan is repaid, the money supply decreases unless more loan is issues<p>3)when banks create loans/money, they ONLY create the money which is just enough to repay the principal, but banks never create money to repay the interest. <p>4)So unless more loans are taken next year, there will be several bankruptcy.<p>So the money supply will keep going up and up and up. This is what many call as Debt Virus.<p>BTW, I do NOT believe in any conspiracy theories that bankers are controlling the world etc. All I am saying is that there are some serious flaws in banking/currency systems which needs to be addressed. There is no needs to panic, but it does need some attenstion.<p>See the book "Debt Virus" by Jacques S. Jaikaran, Ashton L. Veramallay. Here is amzon.com link
http://www.amazon.com/exec/obidos/ASIN/0944435130/avsearch-bkasin-20/103-3697108-4123012<p>The book describes the problem very well. I DO NOT agree with the solution that the author proposes.<p>see also : <p>http://www.devvy.com/money0.html
http://www9.pair.com/xpoez/money/cook
http://www9.pair.com/xpoez/money/debt.html<p>(in the above links, take anti-banker noise with a pinch of salt)<p>-Rahul Mehta
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Re: Can India re-Value the Rupee?

Post by Nikhil Shah »

Narayanan, you are going to love this.<p>...
Fourteen years after the World Bank issued its first structural adjustment loan, most countries are still waiting for the market to "work its magic". Despite global adjustment, the third world's debt burden rose from $785 billion at the beginning of the debt crisis in 1978 to $1.3 trillion in 1992. The structural adjustment loans from the Bank have enabled the third world countries to make interest payments to western commercial banks. Having done this, the Bank went on applying adjustment policies to assure a regular supply of repayments in the medium and long term. Thus, the structural adjustment has brought neither growth nor debt relief, it has certainly intensified poverty.<p>The series of policy measures launched by the Indian government are part of structural adjustment program in India. Government has taken up following measures to implement SAP :<p>Devaluation of rupee by 23%.
New Industrial Policy allowing more foreign investments.
Opening up more areas for private domestic and foreign investment.
Part disinvestment of government equity in profitable public sector enterprises.
Sick public sector units to be closed down.
Reforms of the financial sector by allowing in private banks.
Liberal import and export policy.
Cuts in social sector spending to reduce fiscal deficit.
Amendments to the existing laws and regulations to support reforms.
Market-friendly approach and less government intervention.
Liberalization of the banking system.
Tax reforms leading to greater share of indirect taxes.
All the above men-tioned ingredients of SAP are based on the Anderson Memorandum titled "Trade Reforms in India" dated Nov. 30, 1990 submitted to Government of India by the World Bank. It is interesting to note that this memorandum was not disclosed to the then Prime Minister, Mr. Chandra Shekhar, the then Finance Minister and the Cabinet Secretary by a group of senior officials in the Finance Ministry. Incidentally, all these officials were ex-World Bank and ex-IMF employees. <p>http://www.ieo.org/world-c10-p1.html
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Re: Can India re-Value the Rupee?

Post by Nikhil Shah »

Can anyone explain to me the relationship between Inflation & Devaluation. Is it catch 22? Can someone also try to dig into rate of inflation and rupee devaluation for past 10 years.
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Re: Can India re-Value the Rupee?

Post by Umrao »

Inflation: When TS Pakistan claims Kashmir.
Devaluation: When TS Pakistan does "Odd Job" to the diktats of Uncle in Spin city.
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Re: Can India re-Value the Rupee?

Post by vmshete »

Just one question? Where do u see rupee going in next 2-3 years??
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Re: Can India re-Value the Rupee?

Post by Rahul Mehta »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Nikhil Shah:
Can anyone explain to me the relationship between Inflation & Devaluation. Is it catch 22? Can someone also try to dig into rate of inflation and rupee devaluation for past 10 years.<hr></blockquote><p>The currency with higher inflation will end up losing value (devlauation) against a currency with lower inflation.<p>The change may not be immidiate, but within 3-5 years, it will certainly occur. And there are certain other factors as well. <p> <blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by vmshete:
Just one question? Where do u see rupee going in next 2-3 years??<hr></blockquote><p>Only an Astrologer or Economist can give EXACT answer. And Astrologer's asnwer will be more dependable.<p>IMO, USD will face a severe inflation. There are many failures in market. If these failures start hitting banks, then eventually Govt has to bail them out. So money supply will end up increasing.<p>But Indian Rs is much worse. Not only NPAs are higher, but whole tax collections are also going down, govt debt is much higher, state gov are ALL broke and WORSE, there is huge foreign debt in USD.<p>The best part about US-economy that all its debt is in USD. While a big chunk of debt on India is in USD. <p>So all in all, Indian Rs will fall wrt USD.<p>-Rahul Mehta
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Re: Can India re-Value the Rupee?

Post by kgoan »

[QUOTE]Originally posted by Rahul Mehta:
[QB]<p>>>...IMO, USD will face a severe inflation ... The best part about US-economy that all its debt is in USD...<p>USD are the worlds "reserve" currency. To all intents and purposes, they can print as many as they want, or as many as whatever theory currently in fashion with the Chicago School allows. <p>Anyone remember the S&L mess? The US govt. had a neat trick to fix this. Some of the big banks, (NOT the S&L's) who were badly exposed, were allowed to borrow money from the Fed at a low interest. They then deposited this money with the USGOV for a higher interest rate!!!!! I remember a TV finance guy asking why the US govt didn't just give the banks the money, the answer was that would be blatant "money printing" :roll:
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Re: Can India re-Value the Rupee?

Post by Sridhar »

N:<p>Sorry, sir. Your explanation does not change the result of initially rising and later declining currency. I can send you the relevant worksheet if you so desire :) <p>In defence of economics, the standards used to judge economics or the other sciences like physics or astronomy ... are not the same. Do we have a generalized theory in economics that would magically predict anything? Of course not, and the same holds for the other sciences. There are assumptions made for any theory in any field to hold. Going further to the very philosophy of science, a theory is not a theory unless it can be negated. Having said that, many 'popular' economists (popular as in non-serious researchers, the kind that appear on TV) do not make these assumptions explicit and make irresponsible claims. But hey, so do many who research volcanos or the planets or aeronautics :) The pseudo-researchers in economics are of course given more airtime. Would people pay to hear a talk about aeronautics - unlikely. Would they to hear about the future course of the economy - many would.<p>I would join you in a healthy contempt for many economists, but no more and no less than the pseudo-researchers of any field. BTW, I am not an economist :)
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Re: Can India re-Value the Rupee?

Post by kgoan »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Sridhar:

In defence of economics, the standards used to judge economics or the other sciences like physics or astronomy ... are not the same.
<hr></blockquote><p>*snarl*, <p>Economics is NOT a science. And to speak of it in the same breath as physics.... sacrilege, I say SACRILEGE!!<p>*howl*, *bite*, etc. etc.
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Re: Can India re-Value the Rupee?

Post by Sridhar »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by kgoan:
<p>*snarl*, <p>Economics is NOT a science. And to speak of it in the same breath as physics.... sacrilege, I say SACRILEGE!!<p>*howl*, *bite*, etc. etc.<hr></blockquote><p>Exactly like Galileo was sacrilege to the Church :)
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Re: Can India re-Value the Rupee?

Post by kgoan »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Sridhar:
Exactly like Galileo was sacrilege to the Church :) <hr></blockquote><p>Well, the sheer cheek. Galileo was a mathematician and PHYSICIST. He was fighting superstition, whose modern day variant, in the citadels of power, IS economics. Hummpphhh.
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Re: Can India re-Value the Rupee?

Post by Sridhar »

Many of the best economists, historically and at present were/are trained mathematicians. Many techniques used in physics, particularly in model estimation, were developed in the field of economics and econometrics.<p>Science can be defined as a field that uses a method of scientific enquiry - observation of phenomena, development of theories based on those observations, their validation using empirical data, etc. And economics is as much of a science as physics on any of those counts. Of course, in his own day, Galileo tried to explain the same things, but the Church said something similar to what you said. Fortunately, most people in the scientific community, including the Nobel committee do not agree with you (the Nobel prize is for the 'Economic Sciences'). Just because there are quacks, the field of medicine is not dismissed. Similarly, the economics 'quacks' should not be seen to represent the whole field.
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Re: Can India re-Value the Rupee?

Post by Rahul Mehta »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by kgoan:
Anyone remember the S&L mess? The US govt. had a neat trick to fix this. Some of the big banks, (NOT the S&L's) who were badly exposed, were allowed to borrow money from the Fed at a low interest. They then deposited this money with the USGOV for a higher interest rate!!!!! <hr></blockquote><p>I have read about it. In fact, this is almost a routine. eg Banks borrow from common customers at interest rate equal to or less than FD rate. And many times, interest on US Bonds is far above the bank's interest rate.<p> <blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>So, Rahul, your answer is incorrect. No-one "prints money" anymore. They just create "credit". :roll: <hr></blockquote><p>Creating credit is "almost same as" printing money. I agree, that most of the money these days is just an entry in computer.<p>Even in definition of money supply credit issued by Central Bank is same as note printed by Central Bank<p>-Rahul Mehta
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Re: Can India re-Value the Rupee?

Post by Rahul Mehta »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Sridhar:
Science can be defined as a field that uses a method of scientific enquiry - observation of phenomena, development of theories based on those observations, their validation using empirical data, etc. And economics is as much of a science as physics on any of those counts. ... <hr></blockquote><p>Is it possible to DERIVE a law of economics using laws of physics? No. Obviously, economics is NOT a science. I mean, those statements of economics which can be indeed derived by laws of physics are science. But rest are not.<p>Now if the part of macro-economics that deals with "money supply" is science, can you anyone on this forum answer the following question : What is the (approx. +- 5% error would do) amount of LEGAL TENDER issued in India.<p>Please note, I want to know LEGAL TENDER, not M1, M2, M3, M33 etc.<p>-Rahul Mehta
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Re: Can India re-Value the Rupee?

Post by Div »

Rahul, thanks for the lesson on fiat money. :cool: <p>It is quite amazing to note that the American founding fathers were much more concerned about money in the 18th century than anyone is today. The likes of Adams and Jefferson knew that distress and confusion could only arise because of the ignorance of money, credit and circulation.
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Re: Can India re-Value the Rupee?

Post by member_3805 »

I have a doubt. What criteria does the government use to increase the supply of money in the country? And what 'procedure' does it follow to do it?<p>For example, let us say that with an income of Rs 10,000 a month, a small family in India can have a reasonable standard of living. Assuming that the prices of goods will remain the same, if a poor family's standard of living is to increase (i.e. it is able to buy goods/services worth Rs 10,000 instead of, say, a previous Rs 1000), then the total money available must increase, right? My question is: how does the government 'know' that there is a shortage of money?<p>This is, of course, assuming that the production of goods/services too increases simultaneously. Let us also assume that the costs of goods and services do not fall.
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Re: Can India re-Value the Rupee?

Post by Rahul Mehta »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Arun V Nair:
[QB]I have a doubt. What criteria does the government use to increase the supply of money in the country? And what 'procedure' does it follow to do it?<hr></blockquote><p>The money supply is decided by RBI and NOT by Ministers/PM. Now PM/Minister may be able to have some influence on RBI-Governer, but FINAL power lies with RBI Governor, not PM<p>I dont know if RBI directors can play a role in it.<p> <blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Assuming that the prices of goods will remain the same, if a poor family's standard of living is to increase (i.e. it is able to buy goods/services worth Rs 10,000 instead of, say, a previous Rs 1000), then the total money available must increase, right? My question is: how does the government 'know' that there is a shortage of money?<hr></blockquote><p>There is NO easy way to know if there is "shortage" of money. First, what do you mean by "shortage"? There is NEVER really a shortage of money : its eighter in my pocket/bank or someone elses. The so callaed "demand of money" is confusing concept as money is NOT consumed like other commodities.<p>There is a shortage of money when there are goods, and buyers with money are not willing to buy or invest. Thats shortage as seen from commodity-seller's viewpoint.<p>As per some economists (keynesians) when thosen who have money are not willing to invest nor willing to spend, the Government/Central-Bank should create money, start spending/investing to give a jump start to economy. <p>I believe that Government/RBI prints money whenever they are short of. I dont think they really rake citizens' needs into consideration.<p>-Rahul Mehta
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Re: Can India re-Value the Rupee?

Post by Guest »

Friends
To revalue Indian currency the government of India has to allow the import of gold into the country by our own NRI or citizens.
This measure was taken even during the time of Chidambaram as finance minister.
I hope some one the govet take this seriosly.
You just allow this and then see.
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Re: Can India re-Value the Rupee?

Post by Umrao »

<blockquote><font size="1" face="Verdana, Arial">quote:</font><hr>Originally posted by Kattabommu:
Friends
To revalue Indian currency the government of India has to allow the import of gold into the country by our own NRI or citizens.
This measure was taken even during the time of Chidambaram as finance minister.
I hope some one the govet take this seriosly.
You just allow this and then see.
<hr></blockquote><p>It was not chidambaram, but it was ManMohan Singh under PVN Rao. Hence the 1993 bombay blasts , because that policy made the Gold gand of Dawood unemployed overnight.
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Re: Can India re-Value the Rupee?

Post by Calvin »

What has happened that reserves are ramping up?

http://www.hinduonnet.com/bline/stories/2002033101410100.htm

THE RBI's forex kitty is bulging week after week. The net increase in reserves in the week ended March 22, is $1.13 billion, probably the largest-ever inflow in one week. The total reserves rose to $53.317 billion for the week ended March 22, as compared to $52.189 billion in the previous week.

Bankers and RBI sources say inflows have been quite good in the recent past. There are FDI inflows in respect of old commitments, which have to be met before the fiscal year end and also increased NRI remittances.

Analysts say the central bank is mopping up the liquidity to ensure that the value of rupee does not rise to hurt exporters.

"The market is overflowing with liquidity and the apex bank has to mop it up because they do not want the rupee to strengthen. As a result reserves are getting bolstered,'' a forex dealer with a public sector bank said.

[...]

The significant week on week surging of dollar reserves have triggered rumours to the effect that the full float of the rupee may happen sooner than expected. However forex analysts are quick to dispel such notions and contend that it is only the excess liquidity in the system that is getting directed into the reserves.

[...]
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Re: Can India re-Value the Rupee?

Post by vish »

Originally posted by Calvin:
What has happened that reserves are ramping up?

http://www.hinduonnet.com/bline/stories/2002033101410100.htm

THE RBI's forex kitty is bulging week after week. The net increase in reserves in the week ended March 22, is $1.13 billion, probably the largest-ever inflow in one week. The total reserves rose to $53.317 billion for the week ended March 22, as compared to $52.189 billion in the previous week.
I suspect that the RBI is trying to maintain a currency board - essentially fixing the rupee to a specific fraction of the dollar (perhaps 1/47 or 1/48). And they are doing it without any legislative debate or criticism, where there might be accusations of 'dollarization' of the rupee.

But again, I suspect that strategy is failing: Inflation has remained above 6%, which would not be the case if they openly implemented a currency board, by legislative diktat.
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Re: Can India re-Value the Rupee?

Post by Kuttan »

central bank is mopping up the liquidity to ensure that the value of rupee does not rise to hurt exporters.
This is what I have been saying all along - the desi RBI is controlled by a Mafia of so-called "exporters" and others who hold their assets in foreign currency. Protecting the value of those Swiss, Cayman and Mauritian accounts is far more important than allowing the common working man and woman in India to come up in wealth.

Why is foreign remittance increasing? Ha!!

1. Have you looked at interest rates in the US recently? Money market rates are somewhere around a grand 1.3%.

2. Have you looked at the values on the stock market? I just finished calculating my losses over the past year, so this is a topic as inflammatory as Godhra. :(

3. Desi banks still offer fixed deposits at around 4% or so on the $$ - which sounds great in comparison.

4. You don't expect people to put their money into buying UTI shares, do you?

5. As someone pointed out about TSP remittances (which have also shot up, incidentally) the cost of Hawala operations is probably up since the US NSC figured out how to do it. The Paki taxi drivers are now too busy doing Hawala for the bigwigs in the CIA and State Dept., probably, and hence their fees have shot up. Banks are cheaper.

In India, unlike in other places, money inflow to banks is considered an evil - because now the Bank Officers have to get off their backsides and find relatively safe places to lend the money. Times are tough. Harshad Mehta is the Late Mehta now. Dawood has taken Paki citizenship.

I predict a locust swarm of desi Ministers and bureaucrats now coming on fact-finding trips to the West to burn up all that money.

Wish the RBI could be taken over by someone who has Indian interests in mind ...
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Re: Can India re-Value the Rupee?

Post by kautilya »

The depreciation of rupee by moping up dollars is a planned action being undertaken by RBI. They will continue to do so for next few years, to subsidise the exports, and keep them competitive. The reason they need to do that is because they have to subsidise the exports in a way that is WTO compatible, and this is one good way to do that.
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Re: Can India re-Value the Rupee?

Post by Calvin »

Looks like the reserves continue to move up. They are up by almost another billion this week.

http://www.business-standard.com/today/news.asp?Menu67

[...]
The forex reserves moved up $11.898 billion to 54.154 billion for the year ended March 2002 when compared with $42.256 billion in March 30, 2001.
[...]
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Re: Can India re-Value the Rupee?

Post by Guest »

Yes it is time for that. I thought usually the valuing our money and interest rates and the economic ups and downs used to go together. Here I do not know what is happening? I began to realize something funny is going on in the minds of our Government of officials who do not know what they are doing with their concern ministers.. and why they are doing also they do not know.. Central ministers with their short term achivements try to destroy with officers the whole economic system.
We do not need a radical revalue of ruppes but I would suggest that there is a need for 20 to 25% revalue is essential. T
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Re: Can India re-Value the Rupee?

Post by P Chupunkar »

Theoretically any revaluation in the currency does not make the prices any different. If the markets are efficient prices will automatically drop to reflect that. However, in india the markets are extremely sticky. Take a look at labor markets (non IT), power, infrastructure, commodities etc. Almost of these markets are influenced heavily by government regulation. So changes in currency valuations, are not reflected in these prices immediately.
So if the government increases the valuation of the rupee viz a viz the dollar, black market will prosper lot more as it would be more realistic. These changes will also not percolate down to the common man, and finally the export market will get immediately hit (unless they drop their prices).
I think that the current RBI policy of allowing trades within a band of values and then heavily intervening if the situation goes out of control is the most effectively policy. For one it stabilizes the exchange rate (removing exchange rate fluctuation), two it reduces inflation (which can be seen in effect), and finally RBI is allowing the emergence of a foreign exchange trading market, which when institutionalized will get rid of the hawala market once and for all.
Any attempts to foist irrational currency valuations will only cause suffering, case in point Argentina, which tried to peg onto to the dollar but failed as the underlying macro-economic policy was not sound.
The best way to stimulate the indian economy is to reduce the cost of capital for industries, this can only be achieved if the government does not borrow as much as it continues to do so , hence foreign lender pressure to reduce the fiscal deficit. This along with less sticky markets such as labor, commodities etc and disinvestment is the only way the economy could grow faster. Another reason why disinvestment would be helpful, is that most of the non-performing industries tend to be concentrated in the northen belt (along with the textile factories in MAH). The northen belt is a non-performer in the current economic environment. By disinvestment, these economies would be most impacted and improved in the long run and hence the additional boost to the economy.
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Re: Can India re-Value the Rupee?

Post by Umrao »

Who cares for Rupee when even the cart pusher in Sahara Airport insists on Dollar to touch your baggage.

Rupee is just paisa worth now.

The adhesive that holds the NDA is the power to loot the treasury, with so many defence purchases lined up, this is time to be in nai delli or try your luck in Atlanta suburb (so that one can win Multi Million lotto!! )
As to the question can Rupee be revalued yes it is being continoulsy revalued now it officially stands at Rs 50 to a dollar or 1 Rs = 2 cents.
Thanks to looters like Sinha, Chidambaram Lalloo, Mulayam, Sonia etc
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Re: Can India re-Value the Rupee?

Post by svinayak »

Another reason why disinvestment would be helpful, is that most of the non-performing industries tend to be concentrated in the northen belt (along with the textile factories in MAH). The northen belt is a non-performer in the current economic environment. By disinvestment, these economies would be most impacted and improved in the long run and hence the additional boost to the economy.
Good post. THis perticular observation is very important for Indian economy to free itself from the straight jacket. Just by having good governance in UP and Bihar it can be safely said that the GDP will increase probably even upto by 1% point. But these areas are politically very sensitive for the national parties and the social-economic structure is still semi-feudal ( reminding of present day of Pak). Hence the rest of the country has to give an ultimatum for the political parties to change the setup in this region and it can be safely said that pace of the change in this region is actually determining the pace of change in the entire economy.
P Chupunkar
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Re: Can India re-Value the Rupee?

Post by P Chupunkar »

Originally posted by acharya:
[QBGood post. But these areas are politically very sensitive for the national parties and the social-economic structure is still semi-feudal ( reminding of present day of Pak).[/QB]
thanks. But remember if you live next to a stinking pile of garbage, sooner or later you are bound to be infected. You have to clean up this mess. Signs of it can actually be seen in gujrat. Its like the northen infliction is travelling its way southwards. Very soon the economic engine will get affected.
At one point of time Bihar was amongst the best administered country now look at its situation. Same goes for bengal. This can be repeated anywhere in the country.
Unfortunately for the people of Bihar and UP none of its leaders are capable of delivering it from its current misery. The fact of the matter is that they have got so used to it and taken it for granted is itself appaling. It cries out for intervention.
This is one of the main reasons i have been sour on the BJP. I was hoping that would rescue UP to an extent but clearly that did not happen. To me UP was the litmus test for BJP governance, and it failed miserably. This is extremely disheartening as of all the parties only BJP has the potential to deliver on UP.
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Re: Can India re-Value the Rupee?

Post by Umrao »

"To me UP was the litmus test for BJP governance, and it failed miserably. This is extremely disheartening as of all the parties only BJP has the potential to deliver on UP.

Dead on target, BJP folks are such dumb administrators as can be seen in Gujrat/Up and earlier Rajasthan.
My worry is that as you say this brazen ways of corruption (like eating fodder by Lalloo, yes we have Amma doing a saree scam, and Blues bros doing fertilizer scam etc in south) is going to crrep into south too. As it is congress has taught the nation how to loot (the cement scam of Antulay, the fertilizer scam of PVN and Sons) now this malise will catch on like wild fire.

BJP has bungled big time their cadre have become
like yadvas just before the demise of Kishenji, punch drunk with power.

Time for a rethink. The security of the nation begins as much within the boundaries as out of boundaries!!
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Re: Can India re-Value the Rupee?

Post by ragupta »

Time for a rethink. The security of the nation begins as much within the boundaries as out of boundaries!!

Dead on target!!!.

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On Dollar value, I feel that it would help the world economy if it is devalued by 50% over a period of time. US included. The powerful dollar reduces its export and is moving the jobs outside the country. In one respect it helps underdeveloped and developed country, but if it continous for long, there may be resentment locally. There needs to be a balance, and devaluing dollar is one good way of doing it.
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Re: Can India re-Value the Rupee?

Post by Calvin »

The dollar is a freely traded currency. How do you propose to "devalue" it?
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