They have to lie to us.

Experts are predicting that the rupee will fall below 60 to the dollar. In the offshore non-deliverable forwards, the one-month contract was 60.14, while the three month was 60.84. TOI, 25 June. " It is stock taking time for importers and foreign currency borrowers to monitor damage from shift of new normal for USD/INR spot from 44 to 58-63," said Moses Harding, Executive VP and Head of Trading at IndusInd Bank. Standard Chartered is predicting 60.5 at the year end while Ray Farris of Credit Suisse predicts 61.5 or even 62 in 3-4 months. The government and the Reserve Bank say that they will take steps to check excessive volatility. That is all they can do. Sell dollars if the rupee declines precipitately but they cannot, indeed should not, try to reverse the trend because our foreign currency reserve is limited to 6 months imports and shrinking fast. They are trying to restrict the import of gold but they cannot reduce the import of oil or coal on which the economy depends. Trouble is that Foreign Investors are selling out on Indian stocks and debt. Just this month they have sold stocks worth $1.3 billion, about $900 million in the last 3 sessions. They have also sold $4.3 billion worth of debt, for combined outflow of $5.6 billion. These figures illustrate the criminal stupidity of trying to finance massive government spending through hot money. Such as buying 12 luxury helicopters from Augusta-Westland of Italy for Rs 37 billion. Shades of Bofors once again. It also illustrates why forcing the RBI to reduce interest rates instead of controlling inflation, hoping to encourage investments through increased borrowing, was an act of criminal interference in the working of an independent institution. We have said repeatedly that rising costs of goods and services means that the rupee is capable of buying less and less and is bound to lead to a devaluation of the rupee, as has happened in Venezuela. Now that the rupee is catching up to its Purchasing Power Parity, inflation will rise even higher resulting in further fall of the rupee. Ben Bernanke of the US Federal Reserve has hinted that Quantitative Easing maybe reduced by the end of the year and stopped sometime next year. Expect the rupee to fall to around 80 to the dollar before settling somewhere between 70 and 80. Of course fellows cannot say that because there will be a bloodbath on the markets. They are forced to lie. We understand, with anger.