With the Indian rupee touching the abysmal and bizarre 65 mark against the dollar on Thursday, it is high time the Finance Minister wakes up and do something to stem the steep fall or let those in office go or quit himself.
Unlike the asian currency crisis of the 1990s, the fall of Indian rupee is mainly a handiwork of domestic reasons and the RBI’s failure to visualise its fall and prepare well ahead. If those in office fail, it is the finance minister who should take the blame and bow out. Similar fall in any developed country like Japan would have seen a slew of officials voluntarily bowing out of the office but in India, the "Chalta Hai" mentality is seriously bypassing such collective responsibility.
The fall out on markets too was alarming. The 50-share Nifty slipped for the fifth day in row to below the key 5,300 levels in consonance with the rupee movement. With the US economy showing its weakness, Indian rupee may further fall, unless RBI knows how to stop it or leave it to the government to decide.
Its last minute measures to loosen certain controls on buying bonds would lead to further confusion in the market. Now RBI should speak common man’s language and deal with it that way. It is no more an economist’s paradigm to keep rupee floating southward further. Either they give an explanation to the public or the government steps in to say what it is doing to stem the madness behind rupee’s astonishing and startling fall. We are not a banana republic yet!
India should realise that it is not a banana republic but has the strength of best brains whom it should tap now.
"In our view, the problem is that the RBI is trying to juggle too many balls, which sends confusing signals and damages its credibility," Nomura said in a report on Wednesday. The lesson is to deal with it in candid manner or take over RBI’s responsibility into the hands of the central government.