After months of trying to correct the rupee devalution situation by appreciating the rupee (almost to 39 Rs to a USD), the RBI seemed to exercise damage limitation to the exporters' community by marginally depreciating it. Like a swinging pendullum, the rupee has slowly started the appreciating trend again since this week began. Being an exporter, basically the question I ask in trepidation is - "what's next?".... Will the appreciation continue or can I expect a downswing just around the corner???
Answer to this question is missing. Is there are any part of this interview if omitted? Pl. give in full as I am very much interested in Indian Economics.
RE:answer to Are you in favour of Capital a/c convertibility
by Peter Parker on Jul 21, 2007 07:43 AM Permalink
Answer was given to your question in the one line blurb itself "Crises happens because of internal no confidence" They will not allow full capital account convertibility for these reasons alone. They are scared of regular folks simply converting a large amount of rupees to dollars. The current option is to buy gold which the government kind of regulates.
RE:answer to Are you in favour of Capital a/c convertibility
by chanakya maurya on Jul 21, 2007 01:19 PM Permalink
It is not the regular folks, Peter. Those who have control over millions or rather billions of dollars can, behind the facade of full convertibility, create a havoc and chaos.
It is the international speculators that any government has to be careful about, not the regular folks.
For taking this country forward, two professions are the most important Farmers and Entrepreneurs. We have had farmers committing suicide. This is a very bad news for our country but the good news is that our Entrepreneurs are doing a great job. Take www.indiflight.com for an example. Two IIT guys started this company as a grassroot effort to change the way people fly. This search engine finds the cheapest tickets available and brings the power of air travel to poor people. Wish we could do something similar for farmers too.
One of the reasons of East Asian crisis was huge foreign investment in real estate. Real estate prices were going up day by day because of foreign investment which was unrestricted by any government. When real estate market bubble burst whole crisis begins. Some what similar is happening in India too. Both real estate and stock market are going up simultaneously. Government and RBI need to be cautious
RE:investment patterns also matters
by lax on Jul 20, 2007 10:39 PM Permalink
u r totally wrong about India, coz the RBI doesnt permit FIIs to invest in Real estate. Also investment in stock market is regulated. Admit that, the stock market is dependent on the FIIs, but not the real estate market.
RE:regarding currency strengthening and removing black money
by srinivasan mv on Jul 20, 2007 12:58 PM Permalink
These days politicians are clever. They buy binami lands. If these politicians say Rs. 1000 has no value, it means they are already prepared. It is only the poor salaried class will be having Rs. 1000/- in their lockers for any emergencies, and will get caught by this move.
RE:regarding currency strengthening and removing black money
by ramkrishna on Jul 20, 2007 11:56 AM Permalink
IF THE INDIAN GOVERNMENT TO BE STRONG , THE BLACK MONEY SHOULD BE REMOVED FOR THAT BEST WAY IS-- THE GOVERNMENT CAN SAY OR IMPLEMENT THAT THE CURRENCIES 500 RUPEE DENOMINATION, AND 1000 RUPEE DENOMINATION HAVE NO VALUE.
RE:regarding currency strengthening and removing black money
by Sandeep on Jul 20, 2007 12:24 PM Permalink
Agree, But what will happen to people/local traders having these currencies in pure legitimate form ? where they will go for the losses ? Can we do this at the cost of many honest people ?
RE:RE:regarding currency strengthening and removing black money
by Kishor Bhanushalii on Jul 20, 2007 12:19 PM Permalink
my dear
This will not help. RBI has to work has watch dog in international market and foreign exchange market. Steps taken by RBI till date are all in right direction. India could escape from the negative effects of east asian crisis because of restrictions on the convertibility of rupee
RE:regarding currency strengthening and removing black money
by Jai on Jul 20, 2007 11:26 AM Permalink
What do u want to convey? I can not understand what u mean by this statement
