As suggested earlier in my blogs
that the INR should be allowed to float free and it will be best that it finds
its own inherent value. Not only country’s CAD has evaporated at the levels
which the INR has brushed over the period of last month, but the trade deficit
too has significantly diminished.
This could only have been possible with the
depreciation of the INR, though some would argue that this depreciation would
cause inflationary pressures. But these pressures shall be short term which
will subside over a longer term. The currency’s depreciation will have
miniscule effect on the inflation as a whole.
It has been proved since time
immortal that a weak currency always helps in the exports, whatever little may
it be. It eventually adds up to the growth of a nation.
