Actually, a stronger rupee would help some exporters to the extent of reducing the cost of imported goods. With reduced forex intervention, sudden and sharp hikes in interest rates that affect everyone, including exporters, would be avoided. So even the impact on total exports may be less than what it may appear at first blush. A stronger rupee and a stop to the huge liquidity injection through forex intervention, will pull down consumer price inflation. The US economy may continue to see turmoil for some time. We do not need to import its turmoil into India by pegging the rupee to the US dollar.
The writer is senior fellow at the National Institute of Public Finance and Policy
Epaper
Newsletter
Stocks
Weather
Horoscope
