Rupee convertibility due for crypto overhaul
It is a widely but seldom acknowledged truth that a heavy debt burden can reduce any administration’s resolve to curb inflation. Comments by the finance minister this week about a “sharp attack” on runaway prices served to reaffirm India’s position on the issue. But while the aid measures offer India’s poor a safety shield, as explained, price stability also has its own value. would help keep our economy stable on almost all fronts. After all, a currency must maintain its real value only to guarantee the validity of the sums written in it over time. It would also pave the way for full capital convertibility, a market-oriented idea that gathered dust after the 1997 Asian crisis; open economies bloated by foreign debt saw a reversal in global balances and were thrown into chaos as capital fled amid a currency crash. We have kept some restrictions in place since then, exposing only part of India’s financial sector to external risk, equity markets far more than debt. -convert rupee simply slipped out of our reform program. But then came the crypto, providing a grim exit path, and our folk-level exit clamps now look rusty.
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