Indian rupee hits new low despite central bank moves

[Vinod2070]

Really? You have sub 5% growth for a economy with a low base, a huge trade deficit, huge government deficit and stubbornly high inflation, so please educate me what fundamentals am I missing?

You are missing that the same fundamentals that made us grow at 7%+ average growth for the last 2 decades are still valid, actually many are stronger.

And our current base is as low as China's was 7-8 years back.

Anyway, no point in discussing too much here. It is a global issue at this point that is affecting most countries, not just India. A normal economic cycle.

 

[conworldus]

The 7%+ growth you had was not the result of fundamentals but cheap money available worldwide. India was growing on its large population's consumption by taking huge cheap debt and hence the big trade deficit. The problem is that this population did not produce and is still not producing enough.

Throughout the "high growth" period, India unabashedly sported the title of the inflation king. That's exactly what happens when money is too cheap, and production is too low. Its supply and demand, my friend. Of course, India hinged on the investment story of its young, supposedly capable population and the potential to keep the FII flowing to fund its consumption binge. Then, came the global credit crunch, the cheap money era is gone and the Feds are tightening the rope. Guess what, that "demographic divident" story is still not materializing and India is tanking like the Titanic so which fundamentals are you talking about?

You are missing that the same fundamentals that made us grow at 7%+ average growth for the last 2 decades are still valid, actually many are stronger.

And our current base is as low as China's was 7-8 years back.

Anyway, no point in discussing too much here. It is a global issue at this point that is affecting most countries, not just India. A normal economic cycle.

 

[Vinod2070]

^^ Let's wait and watch.

I have no time to convince you.

And frankly I don't think it is worth the effort, no disrespect meant.

 

[eastwatch]

This is not a correct conclusion to make at all!

All emerging economies, that are export reliant, do like a weak currency in order to maker their exports competitive. Even China's currency was deprecating till 2005 against the US dollar.

As for the percentage depreciation for Taka versus Dollar over the last 38 years, then it would be around 3% a year as you have not accounted for the compounding effect.

Bold part: You are very right. Please read the response given by @Skies in post #43 above. I completely agree to his conclusions.

 

[UKBengali]

You are missing that the same fundamentals that made us grow at 7%+ average growth for the last 2 decades are still valid, actually many are stronger.

And our current base is as low as China's was 7-8 years back.

Anyway, no point in discussing too much here. It is a global issue at this point that is affecting most countries, not just India. A normal economic cycle.

India grew by 7% a year average last decade but only 6% a year in the 1990s. We also need to take into account the fact that India has around 1% a year greater population growth than China and you can see that China is by far and away the faster developing nation in the last 2 decades.

You can easily see the difference in growth rates between China and India if you see the difference that has built up now(around x2.5 advantage to China in GDP(PPP)) from 1990 when the two countries were very nearly equal.

While the India economy is not doomed, there is very little evidence to suggest that it can grow by any more than 7% a year on average(around 6% a year GDP /capita compared to the 9% a year that China managed between 1980-2009). Global economic conditions are not the only reason that India is struggling - there is also a lot of incompetence and downright corrupt behaviour by the current governing coalition.

 

[Vinod2070]

India grew by 7% a year average last decade but only 6% a year in the 1990s. We also need to take into account the fact that India has around 1% a year greater population growth than China and you can see that China is by far and away the faster developing nation in the last 2 decades.

Agree.

You can easily see the difference in growth rates between China and India if you see the difference that has built up now(around x2.5 advantage to China in GDP(PPP)) from 1990 when the two countries were very nearly equal.

Again agree. India did well. China did even better. All credit to them.

While the India economy is not doomed, there is very little evidence to suggest that it can grow by any more than 7% a year on average(around 6% a year GDP /capita compared to the 9% a year that China managed between 1980-2009). Global economic conditions are not the only reason that India is struggling - there is also a lot of incompetence and downright corrupt behaviour by the current governing coalition.

While we have to see whether India can grow above 7% in the future (it has certainly done that in the past), I agree about the mismanagement, corruption and incompetence of the current government for the most part.

But things can change pretty quick if some tough decisions are taken. The reality is better than the perception and the perceptions can change pretty quick.

 

[WAR-rior]

IT IS HILARIOUS INDEED. Why are most pakistanis and some chinese so orgasmic to write bullshit bout indian economy. i mean not even some months of bad performance w.r.t market sentiments, all have simply anounced india doomsday.

dont feel bad but u guyz sound like kinder garten kids with no substance to prove their points but only words and statements to earn free thanks.

We call this type of ppl big tym losers who have done nothing substantial in lyf coz they are internally so hateful and pessimistic. and it isnt a shocker to see a huge chunk of such kind from pakistan. point out if i am wrong.

 

[cirr]

Indians are usually known for being the proverbial frog sitting in the bottom of a well。

But they are at their worst when being the fabled ostriches burying their heads in the sand。

 

[cirr]

You are missing that the same fundamentals that made us grow at 7%+ average growth for the last 2 decades are still valid, actually many are stronger.

And our current base is as low as China's was 7-8 years back.

Anyway, no point in discussing too much here. It is a global issue at this point that is affecting most countries, not just India. A normal economic cycle.

Your current base as low as China's 7-8 years back？

What base？

Your 1.8 trillion USD GDP in FY 2012-2013？

Did your onions sell for 80 Rs a kilo back then？

 

[Lightningbolt]

Indian economy was one giant Ponzi scheme and now that has ended. It's the end of the fraudulent Indian economic boom.

 

[kurup]

Indian economy was one giant Ponzi scheme and now that has ended. It's the end of the fraudulent Indian economic boom.

Anything more from your crystal ball .....

 

[cirr]

Reality check for some of our Indian friends here：

Don't believe in barefaced lies cooked up and told by your fraudulent media and slimy politicians。

PS The predictions were based on forecasts made before the current bouts of extreme rupee weaknesses。

 

[Vinod2070]

Your current base as low as China's 7-8 years back？

What base？

Your 1.8 trillion USD GDP in FY 2012-2013？

Did your onions sell for 80 Rs a kilo back then？

Keeping close track, are we.

Even onion prices! Really!

 

[xyxmt]

IT IS HILARIOUS INDEED. Why are most pakistanis and some chinese so orgasmic to write bullshit bout indian economy. i mean not even some months of bad performance w.r.t market sentiments, all have simply anounced india doomsday.

dont feel bad but u guyz sound like kinder garten kids with no substance to prove their points but only words and statements to earn free thanks.

We call this type of ppl big tym losers who have done nothing substantial in lyf coz they are internally so hateful and pessimistic. and it isnt a shocker to see a huge chunk of such kind from pakistan. point out if i am wrong.

its same as you gloat whenever there is a bomb blast in Pakistan, Newton's law of Enemy's gloat

 

[Shadow_Hunter]

its same as you gloat whenever there is a bomb blast in Pakistan, Newton's law

Newton's law is actually the reason behind why pakistan is being bombed.