The concept of depreciation of any country currency is
considered to help exports and make imports costlier so as to generate the employment. But imports and
exports are affected by a number of factors like growth in world trade,
growth in demand for our exports, domestic need for imports, government
policies etc.
However, depreciation has to be viewed in relation to
issues like depreciation by competitors, extent of overvaluation of
domestic currency, impact on international debt and foreign investment,
extent of domestic inflation etc.
But in India, brisk devaluation of rupee has become curse to common Indians to help exporters but we could not achieve the desired result what we had visualized. Manmohan Singh economics policies failed to generate employment like China what it could enhances and 'generate only corruption'.
The common man is finding it difficult to buy basic food and industrial items like TV, computers, Ac, fridges, laptops etc. Massive devaluation of rupee during the last few weeks is affecting the purchasing power of a common man. Gold and silver is now getting out of reach. Devalued has made petrol, diesel, gold, pulses and all imported items costlier what it was before 1991 when first time, Dr. Manmohan Singh become finance minister of India.
Rising of the prices of such inputs through devaluation would raise industrial costs and reduce the intensity of capacity utilization. because of this, the prices of goods has increased and industrial production has come down which have made common men life very miserable and created all round unemployment.
The students who have gone abroad for study, their parent will have to spend 20% more to subsist their children. The companies who have raised the foreign debts, they will have to pay more to buy dollar to repay the installment resulting further increase in prices in domestic market.
The rates of gold in our domestic market depends upon the parity of rupee. Given that imported gold is valued in dollars and then later converted to a rupee value for domestic consumption, the rupee-dollar exchange rate is important in determining domestic gold prices. If the parity of rupee is reduced to 27 per dollar than the rate of gold will change from 28000/- per 10gm to 14000 rupee. Devaluation of rupee has deprived of Indian women for gold ornaments which are life & death for them.
Similarly, the the fuel price can be bring down from 70/- rupee to 45/- rupee per litre- if the rupee parity value is adjusted near 38 per dollar. Once the prices of fuel is brought down, all problems of inflation can be solved.
In 1983, the parity rates was 9.75 per dollar, in 1991, the Rupee was cut by 11.3%, bringing the rate to Rs25.95 per U.S. Dollar. Now, the rupee against dollar has devalued to 55. That means you shall have to pay rupee 55 to buy one dollar for which you were paying earlier only 9.75 before 1991.
The rate system was unified at the Interbank Free Rate and the Rupee was fully convertible. (WCY1990-1993, p.432). All foreign exchange transactions would be conducted by authorized dealers at market-determined rates. Authorized dealers would not be required to transfer to the Reserve Bank any portion of foreign exchange that was surrendered to them by exporters of goods and services. (IMF 1994, p. 235) The rate listed since was the Interbank Free Rate.
On 31/12/1993, the rupee was again devalued to 31.38 to boast export, and now rupee has slided to 55 but we can not control unabated imports which always dominate export due to our wrong industrial policies.
But what is today position of foreign reserve due to wrong policies of government in center and RBI, that the stock of foreign reserve is less than the foreign debts. The deficit associated by foreign trade gap is increasing and uncontrolled and, our government is not finding solution to stop the depreciation of the rupee. Their hands and feet have swollen, the RBI due to lesser foreign exchange reserve has little option to stop down sliding of rupee further.
We have reached in shameful position like pigs countries (Portugal, Italy, Greece and Spain), Eurozone, and USA because we were adopting the same flop model of economics which they were following. If you only want to increase demands without increasing extra supply of domestic goods and industries to meet with the extra demands than no option left except to import all items to fulfill the demands which has resulted in trade gap more than 180 billion dollar which is very alarming and there is all likelihood that the rupee will further slide down chasing dollar and causing tremendous misery to common man and it will not help in increasing export because dollar is strengthening so importer will switch towards USA goods rather than emerging market goods.
Under no circumstance, rupee be permitted to float above 42 otherwise it can deteriorate the whole health of Indians, economy and present government......... Every Indian must ask prime minister Dr. Manmohan Singh what we have achieved except inflation and dry up of foreign exchange reserve which has remained mainly due to foreign debts???
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But in India, brisk devaluation of rupee has become curse to common Indians to help exporters but we could not achieve the desired result what we had visualized. Manmohan Singh economics policies failed to generate employment like China what it could enhances and 'generate only corruption'.
The common man is finding it difficult to buy basic food and industrial items like TV, computers, Ac, fridges, laptops etc. Massive devaluation of rupee during the last few weeks is affecting the purchasing power of a common man. Gold and silver is now getting out of reach. Devalued has made petrol, diesel, gold, pulses and all imported items costlier what it was before 1991 when first time, Dr. Manmohan Singh become finance minister of India.
Rising of the prices of such inputs through devaluation would raise industrial costs and reduce the intensity of capacity utilization. because of this, the prices of goods has increased and industrial production has come down which have made common men life very miserable and created all round unemployment.
The students who have gone abroad for study, their parent will have to spend 20% more to subsist their children. The companies who have raised the foreign debts, they will have to pay more to buy dollar to repay the installment resulting further increase in prices in domestic market.
The rates of gold in our domestic market depends upon the parity of rupee. Given that imported gold is valued in dollars and then later converted to a rupee value for domestic consumption, the rupee-dollar exchange rate is important in determining domestic gold prices. If the parity of rupee is reduced to 27 per dollar than the rate of gold will change from 28000/- per 10gm to 14000 rupee. Devaluation of rupee has deprived of Indian women for gold ornaments which are life & death for them.
Similarly, the the fuel price can be bring down from 70/- rupee to 45/- rupee per litre- if the rupee parity value is adjusted near 38 per dollar. Once the prices of fuel is brought down, all problems of inflation can be solved.
In 1983, the parity rates was 9.75 per dollar, in 1991, the Rupee was cut by 11.3%, bringing the rate to Rs25.95 per U.S. Dollar. Now, the rupee against dollar has devalued to 55. That means you shall have to pay rupee 55 to buy one dollar for which you were paying earlier only 9.75 before 1991.
The rate system was unified at the Interbank Free Rate and the Rupee was fully convertible. (WCY1990-1993, p.432). All foreign exchange transactions would be conducted by authorized dealers at market-determined rates. Authorized dealers would not be required to transfer to the Reserve Bank any portion of foreign exchange that was surrendered to them by exporters of goods and services. (IMF 1994, p. 235) The rate listed since was the Interbank Free Rate.
On 31/12/1993, the rupee was again devalued to 31.38 to boast export, and now rupee has slided to 55 but we can not control unabated imports which always dominate export due to our wrong industrial policies.
But what is today position of foreign reserve due to wrong policies of government in center and RBI, that the stock of foreign reserve is less than the foreign debts. The deficit associated by foreign trade gap is increasing and uncontrolled and, our government is not finding solution to stop the depreciation of the rupee. Their hands and feet have swollen, the RBI due to lesser foreign exchange reserve has little option to stop down sliding of rupee further.
We have reached in shameful position like pigs countries (Portugal, Italy, Greece and Spain), Eurozone, and USA because we were adopting the same flop model of economics which they were following. If you only want to increase demands without increasing extra supply of domestic goods and industries to meet with the extra demands than no option left except to import all items to fulfill the demands which has resulted in trade gap more than 180 billion dollar which is very alarming and there is all likelihood that the rupee will further slide down chasing dollar and causing tremendous misery to common man and it will not help in increasing export because dollar is strengthening so importer will switch towards USA goods rather than emerging market goods.
Under no circumstance, rupee be permitted to float above 42 otherwise it can deteriorate the whole health of Indians, economy and present government......... Every Indian must ask prime minister Dr. Manmohan Singh what we have achieved except inflation and dry up of foreign exchange reserve which has remained mainly due to foreign debts???
_____________________________________________________________
"Democracy
means- A government of the people, by the vote of the people, by the
money of the people, and for the welfare of the people".
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