How much longer?

"The value of the rupee has more than halved since early 2008. Would rupee depreciation help raise exports and provide a cushion for India's economic growth during the global slowdown that is upon us?" asked Profs Vidya Mahambare & C Veeramani. Exports depend on price and on income of buyers. Depreciation leads to higher cost of imported inputs and domestic inflation raises prices thus hurting exports. In 2021, "India's consumer price inflation was higher at 5.1% compared to the averages for middle-income countries (4.1%) and high income countries (2.5%)." And, although the rupee has fallen against the dollar, it has "consistently appreciated against other major currencies, including the pound, yen and euro, during the same period." That's because the Reserve Bank (RBI) has sold $114.08 billion dollars so that our reserves have fallen from $642.453 billion to $528.37 billion. ET. The relative strength of the rupee against other currencies helps imports while hurting exports. The trade deficit with China was $72.9 billion in 2021-22 and is already up to $87 billion this year. Outlook. "It is growing across the board, meaning we are importing a lot more than we are exporting," said Finance Minister Nirmala Sitharaman. Savage Chinese soldiers killed 20 Indian soldiers in an unprovoked attack in Galwan Valley in Ladakh in June 2020. BS. And yet India gave in to Chinese demands as locals said that "the disengagement that had been doing the rounds as 'de-escalation' was essentially India 'surrendering control' of it own territory by approving China's demand for 'buffer zones'." The Wire. Though we still have enough foreign exchange reserves to cover 8.6 months of imports "both the trade and current account deficits have widened sharply, pointing to a balance-of-payments deficit which could linger for the foreseeable future," wrote Pranjul Bhandari. "India's current account deficit (CAD) widened to 2.8% of gross domestic product (GDP) in the three months through June," to a total of $23.9 billion. Mint. CAD is expected to widen to 5% of GDP in the September quarter before ending at 3.5% of GDP for the 2022-23 financial year. BS. "We believe that India's saving rate has fallen, and that lies at the heart of the current account deficit widening to unsustainable levels." Higher interest rates will encourage household savings while discouraging borrowing and a weaker rupee will reduce imports by making them more expensive. India is to see the greatest rise in salaries in real terms, which means in addition to the rate of inflation, MBN, with real increases in India at 4.6%, followed by Vietnam at 4.0% and China at 3.8%. ET. A stubbornly high inflation is an "invisible" tax on the vulnerable and RBI's monetary policy is ineffective, wrote Prof Deepanshu Mohan. As long as we can fool the people about the myth of being the fastest growing economy. But for how long?