Falling rupee has become Indian govt's worst nightmare before elections (1 USD = 72.78 Rupees). Here's what it can do
Real reasons of rupee weakening and how Indian govt should tackle it (1 USD = 74.43 Rupees) While it’s fascinating to see how exchange rates move in tandem with macroeconomic factors, continuous decline in rupee has raised lot of eyebrows lately. Most of the media and publishing houses have attributed this to current account deficit which sits at $48.72 bn, highest since the record $88.16 bn of 2012-2013. While CAD indeed is one of the factors contributing to rupee downfall but certainly it’s not the only one. Few things that might need little consideration before coming onto any judgement: 1 . India has never had a trade surplus in merchandise in a decade, means its imports have been higher than exports with crude, gold and diamond being the major contributors. On the other hand, it has enjoyed a surplus in invisible trade (services, software) but not enough to offset merchandise deficit. 2 . Crude & Gold are traded in dollars, which means every time we import