Indian Rupee – Worrying For Indian Government:

Indian Government Management is worrying about the fall of Indian Rupee[INR], earmarked more than Rs. 60/US Dollar. This is not due to outflow of Foreign Direct Investment’s[FDI’s] nor Foreign Institutional Investment’s[FII’s]. The main reason for this crisis is the Indian Government Management stopped Financial Reforms in the mid-2008 and keep on gaining the benefits from the past reforms. The economy was growing at about 9% and Management thought that it will continue without doing any reforms.

Reserve Bank of India Management was trying to bring the interest rate down as inflation eases, but due to heavy fluctuation of Indian Rupee, they put a cap for overnight borrowing till Rs. 75000 cr. If the BankingManagement want to borrow more, they have to purchase at the rate of 10.25%. To curb the excess money in the market, Reserve Bank Management is trying to issue Government Bonds worth Rs. 12,000 cr. Bank Rate had been increased to 10.25% from 8.25%. 

The Government and the Reserve Bank Management is not having any idea what they’re doing. The growth of Indian economy is narrowed to 6% per annum, inflation is cooling, but Current Account Deficit[CAD] is galloping faster which stands at 4.6% of Gross Domestic Product[GDP]. Productivity is decreasing and industrial sector is not performing well. Terms of Trade ie., export v/s import is not favouring Indian economy. Sensex must plunge to the bottom and economy must be revived. So leave the Indian Economy and invest outside to gain more profit.