The rupee’s woes don’t seem to fade away. The currency touched an all-time low to 69 against the U.S. dollar last week. The rupee is now the worst performing currency in Asia this year losing 8% in value since January 1. However, it is not the only currency to be on the wane. Besides rupee, the MSCI Emerging Markets currency index has also been down about 6% since April.
Experts also attribute escalating prices of crude oil behind rupee’s decline as importers have to dole out more dollars to buy crude oil.
The current NDA government is drawing flak from all quarters over the decline in rupee’s value mainly from the principal opponent Congress which too faced criticism over the decline in rupee’s value during its rule.
At that time, BJP was so harsh in criticising Congress that is linked to falling in the rupee to fall in the credibility of the then Prime Minister Manmohan Singh setting aside the technical reasons like escalating crude oil prices and rising current account deficit as lame excuses.
- Money: The Tree of Total Happiness
- Role of Economic Diplomacy in India’s Growth Story
- Raghuram Rajan’s ‘I Do What I Do’ Reveals Secrets of Indian Policy Making
- Demonetisation Blunder: Epitome of Modi Government
Interestingly, the BJP is made to taste its own medicine and the rupee trauma seems to worsen further as the current account deficit is estimated to widen further to 2.5 % in the Fiscal Year 2019.
The other reasons attributed to rupee’s fall are the ongoing trade war that is hampering the emerging market currencies and tightening of US monetary policies.
But, neither did the public sympathized with Manmohan Singh when uncontrollable reasons plunged rupee into doldrums, nor will masses show the same to current Prime Minister Narendra Modi in quite similar situations.
All that the current government can do is wait for aforementioned international factors to swing in favour of a rupee or taste the same medicine which it once forced the opposition to swallow.
Either way, the fall in rupee is going to impact the poll season which is knocking the nation’s door.