I am glad that Amar Singh has written to the Prime Minister about the exchange rate and asked to dollar rate be brought down to Rs.39/-.
If that happens, as per him, inflation will come down 2 to 4%.
Amar Singh represents Samajwadi Party which has 39 MPs in Lok Sabha and whose support is crucial for the government to survive.
I hope Amar Singh’s letter will have some effect.
I had written several times about exchange rate manipulation by RBI which had weakened the rupee and was bad for the country.
Many others had written about it.
Our writings proved to be voices in the wilderness.
Vested interests dominated and rupee was weakened.
Amar Singh has also written about banning export of petroleum products.
Products like steel and cement are banned for export.
Why not petroleum products? Inflation has to be 0%.
All measures need to be taken for that.
Exporters have put pressure on the government to weaken the rupee whenever the rupee has strengthened.
However many export products have import components and rupee depreciation hits them also.
Diamond traders import rough diamonds and export polished diamonds.
Rupee depreciation has raised the cost of imports.
Demand has gone down.
Many diamond traders are unable to meet the demand for higher wages by their workers and this has led to strikes and violence.
Rupee shall appreciate.