Search interesting materials

Wednesday, May 09, 2007

Understanding the INR

Arvind Subramanian has an opinion piece in Business Standard titled Action on the currency front inevitable. Update (15/5): Deepak Lal has a very clear-headed piece where he sorts out the confusion.

1 comment:

  1. 1.With bulging FX reserves, it is prudent to diversify the reserves across currencies further.
    The MSS bonds would bear lower interest rate if CRR is reduced.(Banks would be happier with a lower interest rate cut-off in auctions rather than no interest).
    The US$ bought during intervention should be used for investing in higher yield non US$ assets(certainly higher than interest earned on US Government paper and if possible interest paid on MSS bonds) say partly in Brazilian and other emerging market Government bonds . If the RBI is bullish on gold then that too may be purchased in much larger quantitites. Crude oil may also be purchased on an ongoing basis to build a strategic reserve.

    2.If and when the US$ are pulled out of the country by investors, the US$ will not be brought back to the country by RESIDENTS to soften the blow. Lets not be naive!


Please note: Comments are moderated. Only civilised conversation is permitted on this blog. Criticism is perfectly okay; uncivilised language is not. We delete any comment which is spam, has personal attacks against anyone, or uses foul language. We delete any comment which does not contribute to the intellectual discussion about the blog article in question.

LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.