India-Japan expand currency swap pact to 50 billion

[Sergi]

I doubt a calm rational asian guy would think that way, seriously what economic benefits for Japan?



I think stability is more important than going to any 'old level', imho a change (any change) in currency is worse than being fixed at high or low. The industries that have adjusted their production process will be devastated if you make such a huge jump.

Two terms
- hard currency
- Soft currency.

Soft currencies can't remain stable for long as they depend on Hard currency - dollar.

Current spike is due to various policy inactions and election year fears in investers. That will clear in due time and "₹" will be back to its normal level. Wait and watch.
What you said is true for countries with huge prodction base economies like China. Indian economy isnt based on huge prodction but it rely on service sector. And the current spike actually helped them make money in India.

 

[Sergi]

Watch the Video....that I posted where Montek Singh Ahluvalia clearly says that we have more than sufficient safety margin of foreign exchange ...the current deal if at all will be invoked only as last resort in worst case scenario ....
but it will definitely have impact over market sentiments...

And where you see I said any thing about forex ???

What ???
This deal has nothing to do with currency up and downs.
We already have done it. Current offer is good for India and will be done as planned even if Rupee come back to 50 Rs/$.

And how is this related to market sentiments ???
Its just exchange of same "worth" of currency - no loan no trade. Nothing. Just a exchange. It is more like having foreign govt bonds.