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The fall of rupee against the US dollar
The reader would easily recall the fag end of August 2013 when the Indian Parliament had seen repeated adjournments amid opposition demands for an immediate statement from the PM, while the issue created uproar in the Rajya Sabha for some time.

As soon as the Rajya Sabha met for the day, leader of the opposition Arun Jaitley had raised the issue of rupee’s depreciation, which had fallen 20 per cent against the US dollar that year and already breached the Rs 68 mark against 1 US dollar. The same Arun Jaitley who is in power now had declared that time:

“It is a panic situation... we want to know from the Prime Minister what he has in his mind for reviving the situation. In a democracy, the buck stops at the Prime Minister and does not disappear there,” he said, adding, “Prime Minister must take the House and the country into confidence”.

On 29 March 2014, The godman Sri Sri Ravi Shankar had tweeted:

“It is refreshing to know that the rupee will get stronger at Rs 40/- per dollar if Modi comes to power.”

And on 23 June 2014, Shri Narendra Modi, the CM of Gujarat then, had tweeted:

“There is a comp between Congress and the Rupee. Who will fall lower, that is the competition: @narendramodi”

Today, the rupee has just hit a new all-time low. The Indian currency collapsed to a record low of 69.10 against the US dollar by plunging 49 paise in early trade today as rising crude oil prices deepened concerns about the country's current account deficit and inflation dynamics.

Surprisingly,  in all this din of  government’s clampdown on black money, money stashed by Indians in Swiss banks rose over 50 per cent to CHF 1.01 billion (Rs 7,000 crore) in 2017, according to the official annual data released by Swiss National Bank this Thursday. The data shows that total funds held by all foreign clients of Swiss banks rose about 3 per cent to CHF 1.46 trillion or about Rs 100 lakh crore in 2017.

Incidentally, when India received its independence in 1947, Indians could buy one US dollar with just one rupee. Today, Indians will need more than Rs 69 to buy the same US dollar. This fall in rupee's value against the US dollar is called rupee depreciation or depreciation of Indian rupee. Rupee depreciation means that the rupee is becoming less and less valuable with respect to the US dollar.

This might be good news for few exporters because they get more rupees per dollar. Ironically, IT and pharma companies could benefit from this fall. However, it is bad development for importers because we pay more per dollar. Those in textiles, chemicals and metals will be negatively impacted.

India is the world's third largest importer of crude oil after the US and China. So the drop in value of rupee means that imports of crude are now much more expensive for the government.

Global economic slowdown, rather than the UPA or now the NDA regime, is more responsible for the situation. It was unfortunate that in the election 2014, the RSS / BJP conglomerate made the maximum capital out of the bad situation and tarnished the image of the honest and brilliant economist Dr Manmohan Singh.

These days China’s has been facing a slowdown and Yuan devaluation is also been hurting the market sentiments globally. The sharp slowdown in China’s trade and weak commodity prices are also hammering other emerging markets. According to a Citigroup report, a weaker Chinese currency with respect to the Indian rupee could make imports of electronics goods including telecom equipment, industrial machinery, steel and fertiliser more competitive and could impart further disinflation in manufactured products.

This author is not an economist and has only rudimentary knowledge of economics. However, the latest threat delivered by the US Ambassador to the United Nations Nikki Haley has exacerbated the situation as she told Prime Minister Narendra Modi on Wednesday that it was important that India cut Iranian oil use. “Sanctions are coming (on Iran) and we're going forward on that, and with India and the US building strong relationships we hoped that they would lessen their dependence on Iran,” Haley, a member of US President Donald Trump’s cabinet, told two reporters after her meeting with Modi in New Delhi.

It is a shameful dictate for a sovereign country like India. It is really hurting the pride of the nation!

Earlier, a senior State Department official had also said that the White House demanded countries cut all imports of Iranian oil from November with no exemptions expected to be entitled. Washington announced plans to ramp up pressure on its allies to stop funding Iran.

However, “India does not recognize unilateral sanctions, but only sanctions by the United Nations,” said joint secretary for international cooperation at India's petroleum ministry Sunjay Sudhir.

The wheel has come to full circle. It is now Narendra Modi’s turn to explain the situation to the nation in Man Ki Baat in a transparent way. We don’t need any green horn economist, Baba or Guru to palliate, predict or promise in this delicate situation.

Yes, the nation wants to know where we’re heading for!

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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