THE FALL OF RUPEE

THE FALL OF RUPEE

While decluttering my table recently, I found a ten dollar currency note. It was looking new and beautiful without folds or writing on it. Yes, I brought it from the US during 2008 when I visited my daughter, son-in-law and the grand children. The value of dollar was Rs. 32/- at that time. But now it is around Rs. 75/- a dollar. That means the $10 bill has a value of Rs. 750/- or so. Hence the value of rupee has come down drastically.

Thus it indirectly indicates the decline in economic growth of our country. Controlling the exchange rate is the great responsibility of the Government. The Reserve Bank of India, Finance Ministry and the people concerned with finance of India are going up and down to solve this tricky problem. The opposition party as usual finding fault with the ruling party and its ministers day in and day out without helping the Government by suggesting some positive measures if at all any in their wisdom. Finding fault cannot solve the problem of the country.

Big sectors like telecom, mining sector, pharmaceutical industry, real estate, natural gas etc. are being shaken up. But as a common man, I understand that a foreigner coming India for vacation or for any other purpose can spend less for more comfort whereas Indians who go to foreign lands for education, business or vacation has to spend more as the Rupeee value is less. Imported goods are costly for us and exports bring us more Indian Rupee. Indians, who work abroad especially in the US, send their earnings to India so that they get more Indian Rupees. Thus it is advantageous for those who are employed elsewhere.

Although we do not know fully the hard economics of the exchange rates, we do know the implications to certain extent. The stock market is going down, prices of commodities are increasing, gold prices up, corporate end up in debt, bank loans are not paid – are some of the glaring consequences of the fall of Rupee. Who has to correct it? How to correct it? – are some of the questions posed every day. Some economists say that all these mess is due to an enlarged CAD. What is CAD? It is the abbreviation for Current Account Deficit. Very often this phrase is used in economics. CAD simply means that buying more from the world than selling. That is what happens in India and led to the fall of Rupee. The fall of Rupee is only a short-term setback say the Finance Minister of India. Also the same thing is felt by the Chief Economist of UN World Bank. Therefore there is optimism for the Rupee to get up and walk if not run.

Economists of our country are working day and night to bring down the exchange rate of Rupee and try to make Rupee as strong currency in the world. Let us hope their efforts be successful in order to revive the economy of India. But the unfortunate thing is the COVID-19 problem all over the world including India. This pandemic disease may affect the economy of each country of the world. Everything depends on the control of COVID-19. - NARA