Wednesday, August 21, 2013

Why did we bumble on the defence of the rupee?

I have a column in the Economic Times today on this subject.


  1. Completely agree with you Mr Ajay Shah. Else we wouldn't have seen something like this..

    the most basic "interest rate futures" have had many false starts.. so where is the question of CDS?

  2. Rupee depreciation is a good thing for India as it was way overvalued...more chilling would be indian RE that may be hit and w/ that NPA in some banks going way over 5%...
    However I see very bright future for India once this multiyr setback passes...possibly from 2017-20 onwards India should have a good base to launch China like multi decade boom...

  3. Very well written article.
    As I have understood, India's growing current account deficit is financed through FII for a long time.Apart from NRI, FII remains a dominant source of capital account finance, but is this reliable for the long run?An announcement ( US FED) reveals the vulnerability of India's external financing. Best policy may be to keep mouth shut. But this is another debate.Is it not possible to expand export base by engaging with more emerging market economies?Difficult, may be due to recessionary reasons. Only way may be cutting 'unnecessary imports'. What are those? Gold and ???Oil may be difficult to curb. How to attract More FDI? A conventional argument may be that rupee depreciation may automatically correct by increasing export-competitiveness but is it true? and how long we have to wait?


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