It is estimated by all that at present it is not possible to control the trade deficit. Such rising import bills and debt repayment expenses may result in a foreign exchange crisis.
Reserve Bank of India’s efforts to handle the rupee are now failing. Since February, the Reserve Bank has put $ 40 billion in the market from its reserves to ensure that the value of the rupee does not fall. Despite this, market experts predict that soon one dollar will become 80 rupees. It is possible that by the end of this year, the dollar will reach 82 rupees. In such a situation, the advice of some experts, including former Reserve Bank Governor D Subbarao, is significant that India should not empty its foreign exchange reserves like this in an attempt to handle the rupee. Especially considering that in the next six to nine months, India has to repay the short-term debt of $267 billion taken in dollars. India’s foreign exchange reserves stood at $642 billion in September last year. Now $593 billion is left.
The trade deficit in June exceeded $25 billion, a record. Given the situation in the international market, it is estimated that it is not possible to control the trade deficit at the moment. Such rising import bills and debt repayment expenses may result in a foreign exchange crisis. Meanwhile, to handle the value of the rupee, if dollars are kept in the market, then the crisis will increase. A healthy economy is one in which the import bill is paid by the export earnings and the repatriation earnings of the countrymen living abroad. Spending money on this through foreign investment is a problem in itself. Anyway, investors have withdrawn $ 30 billion this year. In the future, they will withdraw more money. It can be said that the time to pay the price for the policies on which the country ran is fast approaching. In such a situation, it is wise to still move forward with folded hands and taking additional measures to mobilize resources. This is possible, if in addition to your ‘hard work’, the opinion of ‘Harvard experts’ is also taken into consideration.
