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Rupee, afloat

For many years, while India has claimed that there is a “market determined exch-ange rate”, in reality the exchange rate has been distorted by RBI’s large-scale trading. As is well known in the field of macroeconomics, when a central bank tries to target the exchange rate, this leads to a loss   ....Read more

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3 Comments |
Float the rupeeBy: Andy Rebeiro | Wednesday , 24 Sep '08 7:28:46 AM Reply | Forward With the launch of currency futures, there is no need for RBI currency manipulation. If anyone is worried about fluctuations, they can always buy the futures to hedge that risk. RBI should stick to its key mandates:- maintain a good growth rate at a reasonable inflation rate. Period. I am amazed Dr. Singh and P. Chidambaram havent done this yet.
Rupee, afloat By: Prof. Raghbendra Jha | Wednesday , 24 Sep '08 6:57:28 AM Reply | Forward This editorial assumes that the case for nominal targeting in India's monetary policy has been settled. This is far from the case. Further, the RBI has been using a multiple indicator approach to monetary policy for some time. This has to be the case since prices respond sluggishly to interest rate changes and current shocks have been mostly supply driven. Though greater flexibility of the rupee may be permitted one should not take the extreme step of floating the rupee completely and making it fully convertible on the capital account. There are strong grounds for disagreeing with both the Rajan Committee report and this editorial.
Drummer in DenialBy: Sahakar Gupta | Wednesday , 24 Sep '08 5:26:30 AM Reply | Forward Our Drummer is pretending to not notice the biggest bailout in modern times being enacted in the United States. The raging Capitalistic Bull has turned into a kitten surviving on govt support. Those demanding the govt to lay its hands off are now begging the same govt to rescue them. Free Market Has Its Limits. And India should draw the right lessons - a bania writing for bania daily can never draw the right lessons.
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