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Ashok Kotwal
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
Introduction to e-Symposium: The GDP conundrum
Posted on: 16 Nov 2016
Ever since India’s Central Statistical Organisation came out with the new GDP series with ... read on »
Introduction to e-Symposium: The idea of a universal basic income in the Indian context
Posted on: 26 Sep 2016
The idea of an unconditional basic income given to all citizens by the State, has caught o ... read on »
Debate: The Aadhaar Bill
Posted on: 02 May 2016
In a debate on the Aadhaar Bill, commentators from academia and civil society will ... read on »

Tag: exchange rate

China’s fitful economic reforms
Eswar Prasad
Posted on: 07 Dec 2015

Last week, IMF elevated China’s yuan to the status of a global reserve currency. In this article, Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University, contends that the fundamental question China’s policymakers now face is whether they will back up their commitment to financial sector reforms with broader measures that will truly free up markets and support them with a strong institutional foundation.
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Responding to external shocks
Ashima Goyal
Posted on: 30 Apr 2015

Following the global financial crisis of 2007-08, the Indian economy was exposed to various shocks. While the major source of shocks was external, the effects were magnified by certain lapses in domestic policy. This column discusses what policies worked and what did not work to reduce excessive rupee volatility, and how the lessons were applied to prepare for any future shocks.
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The nuances of inflation targeting in India
Abhijit Sen Gupta , Rajeswari Sengupta
Posted on: 16 Mar 2015

How prepared is India for inflation targeting? This column suggests that the larger weight assigned by the RBI to tackling inflation over the years, relative to other policy objectives such as stabilising exchange rates, places it in a good position to make the transition to the new regime. However, limited control over supply shocks that impact inflation might continue to pose a challenge. Greater coordination between fiscal and monetary policy would improve the efficacy of inflation targeting.
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Is the rupee fairly valued?
Martin Kessler , Arvind Subramanian
Posted on: 27 Aug 2014

Is the rupee fairly valued, and should the RBI allow it to appreciate beyond its current rate? This column analyses new World Bank data and finds that the rupee is persistently undervalued by 30% or more. Given the undervaluation, it is puzzling to note that India runs large, structural current account deficits.
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How exchange rate changes impact Indian manufacturing firms
Anubha Dhasmana
Posted on: 02 Apr 2014

After falling to its lifetime low of 68.85 against the dollar in August last year, the Rupee has now appreciated to breach the 60-per-dollar mark. This column explores the impact of currency movements on the performance of Indian manufacturing firms. It finds that in the short run, real exchange rate movements have a significant impact on firm performance through changes in import costs, rather than changes in export competitiveness.
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India's unique crisis – a short term fix
Devesh Kapur , Arvind Subramanian
Posted on: 20 Dec 2013

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In their previous article, Kapur and Subramanian discussed the misdiagnosis of India’s crisis, and consequent errors in policy remedies. In this part, they outline short-term actions for reversing the growth slowdown, reducing current account deficit and preventing inflation.
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India's unique crisis
Devesh Kapur , Arvind Subramanian
Posted on: 16 Dec 2013

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In the first of a two-part article, Kapur and Subramanian discuss the misdiagnoses of India’s crisis, and the consequent errors in policy remedies. In the next part, the authors provide a short-term solution for India’s unique crisis.
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What saved the rupee?
Arvind Subramanian
Posted on: 06 Nov 2013

This article analyses the dramatic fall of the rupee between May and August this year, and its recovery thereafter. It asserts that it was primarily external factors and an unconventional intervention by the Reserve Bank of India that influenced the evolution of the rupee during the period.
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Exchange rate movements and Indian firms’ exports
Yin-Wong Cheung , Rajeswari Sengupta
Posted on: 01 Nov 2013

Understanding the effects of exchange-rate changes on a country’s trade balance calls for an analysis of how exchange-rate fluctuations affect the decisions of individual firms. This column explores the effects of changes in the exchange rate on the share of exports of Indian non-financial sector firms.
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Monkeying with the rupee
Debraj Ray
Posted on: 04 Sep 2013

In this article, Debraj Ray discusses the sharp depreciation of the rupee and the ongoing outflow of foreign capital from India. Further, he refutes claims that the costs associated with the Food Security Bill are having a negative impact on the Indian currency.
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The challenges of opening up India’s capital account
Abhijit Sen Gupta , Rajeswari Sengupta
Posted on: 15 May 2013

A key objective for any open economy is to avoid a financial or balance of payments crisis – a goal that often calls for trade-offs between liberalisation and maintaining control of the economy. This column explores the trade offs India has made.
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Exchange-rate pass-through by Indian and Chinese exporters
Sushanta Mallick , Helena Marques
Posted on: 15 Apr 2013
Topics:   Trade , Global Economy


How much does a change in the value of the rupee or the yuan affect the prices of exports from India and China? This column explores the factors behind this ‘exchange-rate pass-through’ and why it is different in the two countries.
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Understanding India’s monetary policy
Rajeswari Sengupta , Nirvikar Singh
Posted on: 21 Dec 2012

From the outside looking in, it may seem that India’s central bank is making up its own rules, making it difficult to predict the next movements in the interest rate. This column argues that the central bank is in fact following a rule, you just have to look hard enough.
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