Title: Fall of the Indian Rupee- Is it an orchestration of the Indian Government?
Abstract Objectives: India has been able to grab an envious position in the league of G8 countries and so far we have taken calculated moves towards becoming a super power by 2020. But during the onset of financial year 2013, India?s pace started to lose steam. Our country?s economy had to bear the brunt of a slowing industrial activity, political mess and the Indian rupee?s continuous slide. This has again brought the spotlight back on India but this time however it is for the wrong reason.
Rupee?s value was sliding so rapidly that it broke all previous records of its lowest values ever. The declining Rupee value has affected all the spheres and strata of our Country. The rupee posted its biggest monthly fall in at least 18 years(1995-2013)
This paper identifies some of the factors that generally lead to a depreciation in the exchange rate of a currency- gaping current account deficit, inflationary pressures within the country, tampering of the bank interest rates, high imports to name a few. In India particularly; increasing Current account deficit, slowing down of the manufacturing activity, RBI?s tight leash of monetary policy and the continuous friction with the Fiscal policy acted as spoil sport for the INR value.
These are rudimentary concepts which are apparent and likely to depreciate any currency not just Rupee alone. But a deeper probe raises an alarming question- ?Did the Rupee value certainly fall due to typical reasons mentioned above or is currency fall an orchestrated measure by the Government?? India?s hope of austerity may also be one of the reasons that may have prompted the Government to tread this path. Yet another dimension that can be assumed is India?s unflinching focus on increasing exports. Therefore the likely question in this regard will be ?Is India deliberately mounting pressure on importers to discourage imports and indirectly promote exports??
Thus in this paper an attempt has been made to question the apparent reasons for the Rupee?s downslide and al
Type: Working Paper
Sponsors: Christ University
