Saturday, September 22, 2018

On Weakening of Rupee vis-à-vis US Dollar

Surajit Das

To buy one US dollar, we have to now pay more than Rs.72 in India, which was less than Rs.64 even in mid-February this year. It is synonymous to say that Indian rupee has been weakened vis-à-vis the US dollar. The value of dollar in terms of domestic currency increases when the supply of dollar falls short relative to the demand for it at aggregate level. The supply of dollar comes from exporting commodities and services and through foreign capital inflow from abroad. The demand for dollar accrues from the import demand and for capital outflow outside the country. However, apart from current and capital accounts of balance of payment mentioned above, there is another channel that can influence the aggregate demand and supply of foreign currency in the domestic market. If the central bank wishes to hold more foreign currency than the current stock or if it depletes the foreign currency reserves, for some reason, then also the foreign exchange market would be affected. If the RBI (Reserve Bank of India) decides to sell some dollars in the Indian market in exchange of domestic currency (Rupee), the aggregate supply of dollar would increase relative to the demand and the price of dollar would come down. In other words, the Rupee would become stronger. On the other hand, if it buys some dollar from the domestic market in order to increase the stock of foreign currency, ceteris paribus, the Rupee would be weakened. And, given any stock of foreign currency reserve of the central bank, in case of a trade deficit or capital account deficit, the Rupee would be weaker and vice-versa.

Thursday, September 13, 2018

Discipline, Dissent and ‘Urban Naxals’

Satyaki Roy
One of the major features of the current regime is that it insinuates a concerted process of criminalization, assassination and intimidation as an evolving architecture of punishment not being backed by any judicial probe. Gauri Lankesh, MM Kalburgi, Govind Pansare died not because they were sentenced to death in the court of law, rather murdered by terrorists who are affiliated to the rightwing outfit Sanatan Sanstha. Since 2015 seventy-seven people mostly belonging to the minority Muslims were lynched to death either by cow vigilantes or by mob who take pride in killing human beings in the name of defending India’s tradition, culture and what not and can easily get away since the current regime believes in promoting a particular ‘way of life’, hence, see nothing wrong in executing faith through extra-judicial power.