I hope it appreciates 10-20% annually and reach at least 1:10. It will ensure that i'll be employed and my job won't be outsourced. Sure, i won't be able to move to India, beacuse i won't be able to afford a R5 5 million appartment, now costing $ 500,000 with exchange rate of 1:10. Also my small savings in the west won't leave me enough Rs to buy into your market either. But that's Ok. I can live with that.
With India moving up i would be able to sell my services and produce to Indian companies and have a comfortable life in Canada.
RE:why cant govt: print rupee as much as they want
by rahul singh on Jun 19, 2007 09:52 PM Permalink
If the govt prints as much money as they want, the market would get flooded with rupee. Hence, value of ruppe would fall down. Simple Supply and Price funda!
RE:why cant govt: print rupee as much as they want
by Oh MyGod on Jun 19, 2007 10:04 PM Permalink
When RBI prints as many notes it wants to. Rs Will loose its value. Inflation Will Go Up. Demand N Supply ratio will b HIT. There will be MORE DEMAND n LEss Supply. Say if Govt Gives u RS 1 Cr in cash. U may go to the bunk n fill in bottles will petrol. If 100 ppl do it. petrol availability will come down. So the prices has to shoot up.
RE:why cant govt: print rupee as much as they want
by Ajay on Jun 19, 2007 09:52 PM Permalink
Sandeep,
The problem is not with printing money but what money does. pronting more money incleases money supply something refered to as M3. More money in the market means people have more to spend which means higher inflation. Printing more money ends up increasing inflation which negates the very reason more money was printed.
Economic theroy basically is about controlling this monet supply, so called M3. No matter what is done rate increases ar CRR - cash reserve ratio, it's all about M3.
who the hell cares whats about rupee or dollar, common indian needs work, money and roti, not these analysis, these analyst ever thought of hungry peoples living in slum areas all these analysis are only for rich peoples not for common indian, so go to hell
RE:Rupee strong Dollar Down
by on Jun 19, 2007 09:39 PM Permalink
For all those crying out loud that the exchange rate dosent matter, appreciating rupee is good, even thought you dont care about it, it works for you. One simple example is petrol, with a stronger rupee you are paying less to import it, in the same way all imports cost less and its all the dynamics of what u export and import . If u are living in an isolated world without any trading with any country and u are self sufficient then sure u dont need to care for the exchange rate.
RE:Rupee strong Dollar Down
by Ajay on Jun 19, 2007 09:59 PM Permalink
You have point, imports beacome cheaper. Some imports you want to make cheaper other like foodgrain you don't. It will distroy farm sector along with poor farmer. Indian wheat is as expensive as what's availble in the international market....curency valuation will kill your north indan farmer as he cannot compete with north american or australian farmer.
is there another way .. maybe find alternate source of energy, say hybrid or electric.
In 1947, US$ was at Rs. 1.5 and UK£ at Rs. 2 There is no reason why Re will not equal or exceed these currencies in a few decades. While the developed world is facing erosion of purchasing power, ageing populations, social security worries, etc., some developing countries are speeding towards much higher incomes, standard of living, social security and what not. It is bound to converge somewhere up in future.
sir, ur article is quite understandable to students like me who are keen on understanding how the "system" works but usually end up quite screwd becoz of lack of background in that particular field.kudos to u and rediff and keep the good work on.
This is a post I have poste on my blog Link as follows: http://joykj3.rediffiland.com/scripts/xanadu_diary_view.php?postId=1182250480
......actual foreign money input from different countries then we will gain out of that. Each country will be able control and calculate their %u201Ccurrency%u201D worth as per the production, export and import of that country. Now it is an imaginary thing (the currency worth), because now the worth of American Dollar is decided by the Corporations as per their needs. So here a question may arise, then in what we must keep our deposite, as we used to do, gold deposit, equal to Rs is the best policy. Joy (NB: I am not a economist so whatever I have expressed here may not be scientifically correct)
RE:RE:RE:Appreciation of Rupee will bring down inflation Cont...
by on Jun 19, 2007 11:15 PM Permalink
Well, you don\'t have to add the footnote. Anyone who reads your posting will know that you failed in your economic, maths and also english grammer at school :)
Wonderful analysis from various angles. But gentlemen and women , problem with economics is that it never could solve any practical problem of humanity. It is fallacious science. Too many theories and result always zero or minus. Our pseudo economics experts sitting at top have destroyed the economy of the country. Who the hell is interested in exchange rate? A rickshaw puller? A school teacher or abai that comes to clean your utensils? What all this discussion is for?
I want results. I want roll back of property prices by at least 50% if not at 2002 prices. I want commodity and drugs and wheat and petrol prices to less than 2.5% inflation rate from 2001 onwards. Man Mohan's Singh, chidamabram are pseudo experts suffering from foreign university degree comples. Chiadamabram knows only one thing service tax, MAT and tax and more tax.Thi9s guy has taxed out brain beyond tolerance. Now he should get out before we all middle class and low class people loose the balance and unbalance the balance sheet of idiots ruling this country ,the UPA of congress and Reds. Reds have turned out to be real corrupt and hypocrites. They have exposed that they were real cause of global problems in last 100 years in world. Time for them to be laid in tomb. So stop all this pseudo economics talks and PPP and PPR etc and talk of price control, jobs, productivity , sending corrupt bureaucrats and business men to gas chambers. There is no way left with almost every second babu rampantly unac
RE:reading the postings here, I think India has great economists
by ricky adams on Jun 20, 2007 03:18 AM Permalink
first of all if you are a true professor, i feel sorry for your students. work on your english seriously; its dreadful. secondly have some decency.if you havn't learnt it by now, its never too late for learning. its 'ladies & gentlemen'; not 'gentlemen and women'. gosh!! how did you become a 'professor'? i would rather not comment on your economics lecture, because i'm not an expert in this field and also i've been living abroad for over four years.
RE:reading the postings here, I think India has great economists
by Rajesh Soni on Jun 20, 2007 01:15 AM Permalink
Professor, hold on your horses... what do you mean by " sending corrupt bureaucrats and **business men** to gas chambers"... why do you bring "business men" in this topic ?
Majority of the taxes are paid by us, businesses... so, give this lecture in your class!
Can there be a common currency for the entire world so that currencies do not fluctuate so much? I prefer a stronger rupee and am happy someone agrees with me, the world is not only of exporters, and if the assumption is right a weaker rupee hurts the middle and lower middle classes and only helps a privileged few, if earning 10,000 rupees in years to come means earning 10,000 dollars then I would prefer rupee to be getting stronger day by day. I am not a high business tycoon and most of my countrymen aren't and going eating out at McDonalds or buying a foreign car or even this computer on which I write this message does not make me rich in any sense so Globalization does not help me in that count, it only increases consumerism without paying heed to increasing the income of the consumer in any sense, a stronger rupee does and whatever microeconomics is used in this regard this is the actual situation, I don't have 8% GDP growth in my house or anywhere around me so I don't see any change in the situation except for rise in consumerism and more costly products available. But is it possible that there be one global currency something like the Euro at a global scale? and will it be beneficial to the Indian Economy as well as Global Economy at large? Overall I just hope the rupee rises further.
RE:Can there be a Global Monetary Union similar to the Euro at the European Level?
by Prof R K Gupta-India on Jun 19, 2007 08:01 PM Permalink
ha ha ha .brilliant idea? Did you know that after 2nd world war Germans carried bags of money but could not get bread and same happened din UUSR post glasnost. What is money by the way?and what is currency?How can you have same currency every where and even if you have one different countries will demand different rates for goods and services depending on their internal cost factors. I just cant understand why Indians are making so much noise about rupee appreciation. Is it because since last 60 years we always saw it dipping south?we cant digest it?Guys things take care of themselves and equilibrium is reached when factors of production and demand balance out between various trading partners. How does it matter if Rupee is equal 1/50 or 1/20 of dollar so far as I am productive and efficient and hold technology in my favour. To hell with exchange rate. After all it is two way transactions. If I don't buy from USA ,I buy from UK and vice versa how does it matter?Why are we giving so much importance to dollars? or is it that out boneless and inefficient sheltered exporters unable to met global competition. If you have technology and USP why not ask for more dollars? WE do not attack the cause but always clamour for short term symptoms and relief. Governemnt should put its thumb in my mouth. The government should reduce pertol and diesel prices so infaltion co,mes down rather than bothering about exchange rate.Why they are quiet?They are very quick in raising rates.
RE:Can there be a Global Monetary Union similar to the Euro at the European Level?
by Akash on Jun 19, 2007 08:15 PM Permalink
That was a question of mine I had asked not a statement that I had made, an appreciating rupee as in such I only find in the business column of my newspaper but at the same time I find rise in essential commodity prices and that's why I cared to ask this question, many European countries want to revert to the Pre-Euro period of having their own national currencies but what exactly is happening there? and this is a question, I wish to know what is happening there in respect to increase in income and also employment since france and certain other countries have high unemployment . Has it benefited them or made their lives more miserable? If not at a Global level can it be done at a regional level for e.g. East Asian Community?
RE:Can there be a Global Monetary Union similar to the Euro at the European Level?
by RajneeshChandraMohan Jain on Jun 19, 2007 07:46 PM Permalink
USA don't want global currency to happen. Dollar is used as currency in many countries including Russia. (After 1998-99 discontinuation of old ruble Russians don't trust their government much.)
From USA's point of view, If there are Idiots who accepts our IOUs (i.e. dollar) outside USA, why stop it. As worst case USA can always print how ever much dollar they want. Because it is their currency.
RE:Can there be a Global Monetary Union similar to the Euro at the European Level?
by vivek kumar on Jun 19, 2007 07:51 PM Permalink
Universal currency is not possible as GDP for different country is different and it will not be possible for countries who are trading (pls note, exporting as well as importing countries)at great length. Earlier gold was the base but its no longer used worldwide for trading so, dollar is considered as base for evaluation. This is because its a only currency used worldwide. I agree that Secondly, I agree that major population live below poverty line or not used to Macdonald's, but its political problem. You see, appreciating ruppee indicate stronger economy which will help the political system in leveraging.GDP will always be low in India because "KAMANE WALE KAM HAI KHANE WAALE JYADA"
RE:can anyone say this message in 5 lines please??
by ashok advani on Jun 19, 2007 08:55 PM Permalink
Even i request for summary of this article, Problem has been told what is a solution.
The best way to solve this problem is to hold foreign reserves in Euro also besides dollar reserves. This will protect the Indian economy against drastic fluctuations in the dollar value and will also make the rupee more stable.
Make sure we do not sell dollar reserves but start accumalating Euro reserves from now onwards!
