Friday, November 18, 2011

India's Rupee: Asia's Worst-Performing Currency

The rupee has plunged 14%, making it the world's third-worst performing currency, after the Turkish lira and the Kenyan shilling. At $19.6 billion, the trade deficit is highest in four years.

This in turn has caused a jump in the current account deficit, or the trade deficit plus interest payments and other transfers. It reached $14.1 billion in the April-June quarter, from $12.0 billion a year earlier, amid lower receipts from software and other services.

India’s widening trade deficit


Non Carborundum said...

More evidence that Indian real GDP growth rate is zero to negative. Currency depreciation and inflation go hand in hand. Govt. figure of ~10% for inflation is fudged.

If the Rupee is depreciating against the dollar @14% and if commodities, including gold are rising against the dollar, then the Rupee is depreciating against commodities @>14% , say 20%. If nominal GPD growth rate is ~17%, then real GDP growth rate is (17-20)% or ~ minus 3%.