Appreciating rupee-threat

CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors)   (2195 Points)

28 October 2010  

The Indian rupee is soaring — up 9% against the dollar in the last 16 months. That has taken a toll on exports like textiles by making them more expensive on the world market. And the strong rupee poses longerterm threats of overheating the economy . But instead of fighting currency appreciation, as Brazil and some other countries have done, India has been willing to let the rupee rise – for now, at least.

India is simply too hungry for the foreign capital that is drawn to the strong rupee and is driving it higher, because that influx of money is helping support this country’s approach to developing a modern consumer economy.