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CoverStory PRESIDENTIAL POLLS
CURRENCY

All Opposition
parties have come
together against Modi

he rupee has just hit a new all-time low RBI was doing whatever is necessary to deal with All parameters suggest that the bearish trends indicates softening of inflation. The trade war
and for the time crossed the 72 mark for the situation. Finance minister Arun Jaitley tried to would continue and rupee might weaken further. between the US and China and the spat between
the even as US dollar eased a bit in glob- comfort the market by saying that the global risk In fact the rupee had its worst month in three Turkey and America is another cause of con -
T al markets. When I filed my cover story aversion towards emerging market currencies was years in August, 2018 as crude rallied on specula- cern. Currency depreciation for any developing
“Fuel on Fire” sometime back for Tehelka, little did due to the recent developments in Turkey. tion sanctions on Iran will shrink global supplies. economy could be a major stumbling block in its
I know that the predictions would be so true and It was expected that Prime Minister. Narendra The crude import bill for the world’s fastest-grow- growth. It calls for measures to encourage exports
come prophetic. In few months rupee has fallen Modi’s speech on the occasion of Independence ing oil user surged 76 per cent in July from a year and strengthen manufacturing sector to reduce
to abysmally low levels and fuel prices further Day, which was focused on India’s socio-economic earlier to $10.2 billion. That pushed up the trade import overdependence. Prime Minister’s “Make
skyrocketed. The fall is even more than symbolic development, would halt this free fall when the deficit to $18 billion, the most in five years. Why In India” should be given a further push to give
because this Independence Day India entered in markets reopened. However, contrary to expec- worst is not over yet and pain still to continue is required impetus to manufacturing sector to avoid
its 72nd year of Independence and Rupee touched tations, the skeptics had a field day and rupee, because India imports nearly 83 per cent of its over-dependence on imports.
its nadir at 72. Naturally hash tag India@72 and showed no signs of recovering and had fallen to crude oil requirement. Continued strengthening of the US dollar, lack
Rupee@72 appeared imminent. a record low. However, Finance Minister’s state- The rising crude oil prices have deepened con- of foreign direct investment (FDI) and concerns
Indian currency has fallen more than 12 per cent ment that ‘India’s macro fundamentals remain cerns about the country’s current account deficit over rising oil prices are likely to keep the rupee
on a year-to-date basis, making it one of the worst resilient’ was, indeed, reassuring, especially when and inflation dynamics as the downslide of the under pressure and push it further down against
performing currencies among emerging markets. the country is back on the higher growth trajectory rupee against the dollar continues unabated. the US dollar. Analysts said trade war between
The trends indicate that the pain might not be just after showing a robust GDP rate of 8.2 per cent. The About three months ago, it fell to a 15-month low. China and the US is putting pressure on all the
over yet. Finance Minister Arun Jaitley attributed growth rate made India, the fastest growing econ- And now it has plummeted below the psychologi- Asian currencies, but rupee is the worst hit so
the fall in rupee to global factors and said there was omy of the world, even beating China in the game, cal 72-mark. While the cushion of over $400 bil- far. Foreign portfolio inflows into the domestic
no need for panic or knee-jerk reactions since the but ironically worst was not over. lion forex reserve is comforting, the latest data equity market have also come down due to the

TEHELKA / 30 SEPTEMBER 2018 18 WWW.TEHELKA.COM TEHELKA / 30 SEPTEMBER 2018 19 WWW.TEHELKA.COM

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