The value of Rupee in terms of Dollar has been dwindling for a few days, and it reaches at floor level.The demand for Rupee in open market is falling continuously.The indices are downward.There is no sign of upward movement.Somebody think that it is the cause of decrease in Euro Dollar rate as a result of Euro crisis which was started from the financial crisis in US economy as well.The falling Rupee causes a huge losses of current account balances and increases debt burden.The control of imports through dollar is the remedy,but the essential import could not be cut down.The petrodollar is moving upward day by day,so the hike of fuel price may cut the demand for fuel by which dollar payment may be less than before. The Govt. policy does focus on that point,but this could not improve the Rupee demand in the foreign market.Dr.C. Rangarajan,the Chairman of the Economic Advisor of the PM does not want to issue India bond to combat the situation,rather he advises to watch more in the market.A proposal came to take dollar inflows,but this will affect India's debt, on the other hand,this very short run dollar inflows might not be influential for improving rupee demand to rise.India should detect the chief factors of demands of Rupee abroad, and frame the policies to control those factors.India's credit rating in international is only BB which is very poor to compete against US market and Euro market.Moreover,India's international competitive index is very low as against other developed countries.So,Indian Government should introduce the policies of increasing credit rating,competitiveness index,export potentialities,cut major import bills and to improve current account deficit,so that demand for India Rupee may rise slowly and steadily.
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AuthorDebesh Bhowmik Archives
January 2019
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