Recovering rupee

After being stampeded by the US dollar for the last many months, it is picking strength

September 26, 2023


The good news is that the rupee is limping towards normalcy. After being stampeded by the US dollar for the last many months, it is picking strength and that seems to be primarily owing to an effective crackdown on hoarders and rumour mongers. At the close of day on Monday, the rupee gained 50 paisa to its value over the weekend and was trading in open market at 290.86 for a greenback. The operation against black marketers is showing results, and this goes on to confirm that the problem widely rested in our selfish inner manipulations at the cost of the national exchequer. On the same wavelength, the confidence that exporters are gathering momentum has led to a more cherished environment as many have opted for forward selling. It is widely hoped that a sustained regulatory approach can further lift the rupee and dump the dollarisation sentiments that had pushed the fiat to the brink of disaster.

If projections are any criterion, the rupee will settle down for 285 to a dollar in the next week or so. But again, it will be difficult for the currency to hold ground for long if cushions of bailout from the Middle Eastern countries and China are not in the pipeline. If a positive vibes set in, it is predicted that a dollar will be at the cost of Rs260 to 265, which is most probably its real value, taking into account the fragile economy at hand. It’s time for the central bank and regulatory bodies to keep a lid on money exchangers, and monitor an untoward outflow of foreign exchange. The selling-in of the US currency is on the cards as hoarders and minters will stand discouraged with the prevailing thrust of the rupee gaining ground.

The authorities will be better advised to keep afloat the market forces, and strictly adhere to the parity of open market and official rate of the currency as agreed with the IMF. Any misadventure as undertaken by the previous coalition dispensation by opting for massive devaluation must be resisted. Boosting exports and curtailing imports is the minimum that is desired.

Published in The Express Tribune, September 26th, 2023.

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