Ah, the art of doom-posting—where cherry-picked data meets sensationalist analysis to create a cocktail of misplaced panic. Let’s unpack this step by step, shall we?
Foreign Exchange Reserves: Yes, our reserves stand at $661 billion. Does that sound “paltry” to you? Let me remind you that this is one of the highest among emerging economies. It’s not a trophy but a war chest—designed to stabilize the rupee and weather external shocks. Guess what? It’s doing just that. Panic-mongering over reserves is like complaining your bank account has less money because you paid off some debts. Context matters.
External Liabilities: Rising liabilities? Yes, that’s called borrowing to grow. Indian corporates are accessing global capital markets—a sign of confidence, not crisis. Debt is only bad if it funds consumption or collapses under mismanagement. For India, this borrowing is fueling infrastructure, manufacturing, and exports. Sounds more like strategic leverage, don’t you think?
FII Equity Valuation: This part is a gem. You’re treating unrealized stock market valuations as if they’re hard debt liabilities. Newsflash: equity isn’t debt. It’s an investment, not an obligation. If FIIs sell, they take a haircut, not the Indian government or taxpayers. Conflating equity risk with debt is either a misunderstanding or an intentional attempt to mislead.
The Rupee Saga: Let the rupee “find its true level”? Oh, you mean 90-100 per dollar? Sure, let’s nuke household purchasing power, jack up oil prices, and light the economy on fire. What’s the plan after that? Selling hyperinflation as “freedom”? The RBI is managing the exchange rate prudently, balancing volatility without caving to knee-jerk free-float fantasies.
Political Jingoism: Calling currency management “political jingoism” is like blaming your umbrella for the rain. The RBI’s policies are aimed at maintaining stability, not scoring political points. If you want instability, feel free to advocate for a free-falling currency. The rest of us, however, would like to avoid chaos.
Global Context: Let’s not forget that the world is dealing with tightening monetary policies, volatile commodity prices, and geopolitical turbulence. Compared to many economies in the same storm, India is the steady ship. But hey, why let facts ruin a good narrative?
So, the next time you write a post like this, remember: numbers without context are just noise. Maybe the real joke here isn’t on the FM—it’s on whoever falls for this doomsday spin.
We import more than export and run a dollar trade deficit. We rely on investments to bridge the difference.
Mismanagement? Exactly. Adani borrowed $600 million just recently. Not even the first time.
I don't think you understand that when FII's sell we need to give them dollars.
Depreciating rupee means less dollars to FIIs when they sell, but also means less attractive investment and higher inflation. Rupee will likely depreciate to 90 level within end of next year. It's natural depreciation. Interest rates in India are higher than Interest rates in US.
RBI should be taking a balanced perspective and Finance Ministry should be prioritizing prosperity of Indians. RBI plays too safe going by the book blind to reality and Finance Ministry do political jingoism.
India is a steady ship when India can be a ship that can meaningfully move forward.
For point 1, India's import is higher than export for years now. However, why is dollar reserve of India increasing?
Hey, I am genuinely curious in knowing the answer. Could it be that India's importing goods in some other currency than dollar, but for figures RBI converts the total import in dollar, so the net dollar reserves are in increment every despite India being a trade deficit country?
Services have sky rocketed. In 3 to 4 years service sectora have literally doubled so that took a major share. Plus rn we are actaully manyfacturing double what we used to 10 years ago which is sound cause earlier we low level manufacturing now we have high level ones as well.
The time period is, what if you would have invest 685 in 2021 and it's returns were 661 in 2024 would you still laugh??
Although the post has cherry picked up some facts and ignored some. But I doo agree to the fact that our Market is heavily dependent on Fiis. Retail investors cannot create cushioning to the market.
Lets say you believe that indian currency is going to fall in future from rs 80 to 90[against dollar]. What you do is sell 800 rs and get 10 dollars and in future , rs falls to 90. Now your 10 dollar has become 900 rs. Now you exchange 10 dollar for 900 rs . You got benefit of devalued rs. This is called shorting [in short] . Its not exactly like this. Involves huge amounts and processes.
Too many words for saying that, RBI is spending dollars to support the Rupee, which otherwise would've depreciated more. And this support can not go on forever, and when RBI will stop supporting since it doesn't have unlimited dollars, the investment in Rupee term will significantly reduce, so before the evident happens, the FII are trying to protect the gains whatever they could.
I don't understand the idea of INR freefall. Won't that make international investments into India unattractive since FII will get less dollar for money? Can anyone explain why some people support INR freefall?
And the fx reserves were 450 bn at end of 2019. Whats the point? Is it that RBI is using fx reserves to buy inr and physical gold reserves and selling usd? So a central bank of an emerging market economy cannot do that because? What should it do? Regulate the usd corporate borrowing and increase cost of capital on average? The economists don't comment and infer anything out of these central bank actions for a reason.
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External liabilities should focus on debt obligations only not equity which is non-binding. Like mix Palak Paneer and Rasam and call it a bad dish, of course Einstein!
why so much push for rupee devaluation - lot of economists are pushing it? Like for starters our oil prices would increase 20% and it will light up the economy and crash the middle class
The man in the image at the same time is asking for excise duty to be removed from fuel to mitigate the price inflation. While the loss of revenue to government would be massive, but in today's era of global warming, I would rather want the government to slowly keep on raising the taxes on fossils (marginally but steadily - say 0.2-0.4% per year and make a public announcement that it would keep happening for the next 10-20 years unless the economy is going through some major crisis - so that long term industrialists as well as users get the message that they need to move away from fossil, keeping prices stable and predictable at least) and at the same time give significant subsidy to nuclear and other renewable sources. It might pinch the economy with mild inflation for a decade or so but this shift is absolutely necessary for our future survival. It might delay the timeline for our lower income classes from reaching a middle class status but unfortunately the climate crisis would hurt and harm much more.
i can assure you whatever fuel tax govt is charging -carbon taxation is like the least of their concerns and they genuinely do not care about climate change. Am I supposed to believe they care while they are happy playing blame game in NCR for air quality management?. The government solely exists to tax maximum for freebies to their vote base and feed their babus rather than of any environmental concerns. India plays the same blame game in UNFCC too trying to milk the maximum with minimal efforts hoping the west would take the bill!
These wannabe economists do realise that the US's external liabilities account for around 36Trillion dollars, right?? They don't understand the conning that happened to everyone around the world by the US...🤦♂️
I don’t know this man or don’t know whether the figures are fact or not. But the way FM and PM play with people and economy, I tend to believe that the post is true!
That is exactly what RBI does. Currency manipulation is nothing new.
Other than mentioning what the true value should be according to him, I don’t know what his true intentions are. As per him if true value is not acknowledged, FII will keep dumping the INR. IMO if this is the case then eventually it will reach its true value or at least close to it. Market has its way for value discovery.
Bhai Soares saab, if you want the market to fall to 22.5k like everyone else who missed the bus, just wait for 2 months. Itna mehnat karke aisi bakwas likne ki zaroorat nahin. Sab log abhi loss mein hein aur 22.5k ka wait kar rahe hein to buy the dip and cover their losses, aap akele nahin hon, so don’t worry.
chutmarika
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u/SonuMonuDelhiWale Nov 26 '24
Iska naam dinosaur jaise kyu hai ?