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Indian rupee falls second time in two weeks

What is the Indian government doing to stop this currency collapse?

I'm talking about major structural reforms, not things like using forex reserves to prop up the Rupee in the short-term.
 
India is a tanking economy, rupee is fluctuating nervously all investors are running out because they cant deal with such a bad credit rating
 
how dare you to question the world's 'biggest democracy' and its 'free media'!!,

rupee falling is just an orchestrated CCP propaganda to throw mud on Indians face```

You are correct. I forgot about the incredible India.

What is the Indian government doing to stop this currency collapse?

I'm talking about major structural reforms, not things like using forex reserves to prop up the Rupee in the short-term.

Declare bankrupt and ask each state to create their own currency.
 
Indian consumers are smart, they are buying gold which preserves their wealth. They buy gold not only historical reasons but because of inflation. The worse the currency falls more people will buy gold. India needs to export more, not stop gold imports. You are dealing with the symptoms, not the cause.

China is buying gold but not revealing the total amount to not panic global investors. The US bonds are more strategic investment than investment for money. I think there is an agreement between China and the US that both will help each other. China gets access to US market in return we buy their bonds.

There are serious structural problems, which need to be addressed. Here is an article, which makes a lot of sense. Unfortunately, the current GoI is busy playing vote bank politics instead of fixing the economy. The requirement is build up capacities for manufacturing, especially when you have such a huge buying consumer base. This major flaw is what is getting exposed now. Service orientation is geared for exports as of date. Manufacturing has been given step motherly treatment. The GoI all it thinks of for raising money is sell assets. I, personally think people above the age of 70 should not be in any decision making process, they become senile. Over the past 4 years, I am yet to see a policy which encourages manufacturing. Why? Because, it does not win votes.

The country urgently needs to shift focus from finance to commerce: Uday Kotak, Kotak Mahindra Bank - The Economic Times
 
Rupee Said to Spur India to Mull First Sovereign Bond Overseas - Businessweek

India is considering selling sovereign bonds abroad for the first time as policy makers weigh measures to help stem rupee declines, two officials with direct knowledge of the matter said.

Now it seems India wants to borrow money from overseas to help stem the fall of the Rupee.

This will be the FIRST time that India has sold sovereign bonds overseas.

Unfortunately this seems to be one of the underlying causes of the whole problem, borrowing money to fund deficits. It only provides short-term relief, and does nothing to change the underlying cause of the deficit.
 
Rupee Said to Spur India to Mull First Sovereign Bond Overseas - Businessweek



Now it seems India wants to borrow money from overseas to help stem the fall of the Rupee.

This will be the FIRST time that India has sold sovereign bonds overseas.

Unfortunately this seems to be one of the underlying causes of the whole problem, borrowing money to fund deficits. It only provides short-term relief, and does nothing to change the underlying cause of the deficit.

When the FDI is set to flow into the country and new jobs are created, the falling rupee is a boon.
 
It seems like this analysis was spot on.

India in 2013 will be one of the prime examples of the intrusion of political factors into what had been until recently seen as a long-term economic success story. We have all read articles about how, with the looming long-term structural slowing of China’s economy, India was poised to become the world’s next “growth uber alles” country. Not so fast.

A landslide re-election in 2009 enabled the Congress Party coalition to rule without the encumbrance of the communist party, which congress often blamed for holding back reform. Markets surged, and expectations rose for a new round of fundamental reforms. After all, the architect of Indian reform, Manmohan Singh, was now in full control, and could claim both the confidence of party leader Sonia Gandhi and the commitment of a large group of savvy technocrats ready and willing to push the reformist boundaries. Large-scale reforms – to mining, energy, land acquisition, tax regimes, financing instruments and more–were to boost economic growth toward a 10% trajectory.

But while India sustained generally substantial growth rates, the tough political choices on reform were continually left for the next parliamentary session, and the breakthrough to higher growth was not achieved. Instead, corruption issues tainted the government, coalition partners proved to be less compliant than expected and, most importantly, the anti-reform elements within congress showed that they still had considerable political clout and influence with the “ruling family.”

In 2013, the ability of the government to implement robust economic policies will decline even further, perpetuating India’s “stalling or falling” outlook. As general elections draw closer, political opportunism and obstructionism will increase. Any support for reform from the fickle regional parties that hold the balance of power in parliament will likely wane. These parties will distance themselves from the unpopular, corruption-tainted congress, increase the powers of the state governments they control vis-à-vis New Delhi and position themselves as kingmakers in the post-election landscape.

Congress’s appetite to push for any reforms will diminish as it goes into full-blown campaigning mode. For its part, the opposition BJP will remain obstructionist, especially given that it will be politically consumed by figuring out who should lead the party in the upcoming election battle. These trends will be exacerbated if the election is held early, before the end of 2013. Poor policymaking will extend to fiscal policy, where any meaningful fiscal consolidation in 2013 is unlikely.

The government could seek to boost its support in the rural areas through an agricultural loan waiver program -- a traditional Indian election-year gimmick. Even more problematic for long-term fiscal balance would be a national food security bill that Sonia Gandhi sees as a key vote-winning plank for congress. This could increase India’s food subsidy spending by the equivalent of 2% of GDP. Populist pressures and India’s fractious political environment virtually guarantee that the government will not deliver on its 2012 budget promise to reduce total subsidy spending to 2% of GDP.

Continued profligacy heightens the looming risk of a sovereign ratings downgrade to “junk” status, though the government will seek to accomplish just enough on the reform and fiscal fronts to forestall a downgrade, which heightens India’s fiscal troubles by raising the government’s borrowing costs. It would also precipitate a fall-off in FDI inflows and a likely outflow of foreign portfolio inflows, which in turn would put downward pressure on the rupee.

In the best of circumstances, the political context for economic reform might improve following the elections. But, at this point, the more likely outcome is that India’s policymaking environment becomes even more difficult as the poll is expected to return a more fractious and divided parliament, generating a weak ruling coalition without the political support for a strong reformist push.
 
Then why is the Indian government so desperate to stop the rupee from falling? :no:

Because we have a massive trade deficit and Current Account deficit, 50% die to Petroleum, and 50% due to the insatiable demand for gold. Doesnt take much time to exhaust the forex reserves. Fortunately, Iran has agreed to accept Rupee payments so now matters should ease up a bit.And gold the Finance Minister has been desperately trying to discourage, but Indians know better what real wealth it. so no effect of his pleadings.
 
Indian FDI is falling because investors have lost confidence in India. That's why the Rupee is collapsing.

Haha.......We are expecting better FDI than last year and undervaluing our currency help us locally.
 
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