Chinese-Dragon
RETIRED TTA
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- Jul 9, 2010
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Soros is indeed the man who broke the bank of England.
Damn, with people like George Soros around, it makes me happy that the RMB is on a "managed floating" exchange rate, rather than a free-floating one.
What is the cause for this free fall , if I can get a brief idea ?
People lost confidence in the Rupee, due to poor economic fundamentals such as a large and persistent current account deficit, high debt-to-GDP ratio and a massive fiscal deficit. Not to mention slowing growth and rising unemployment.
The worst thing though, is when the Indian government tried to save the Rupee using half-measures. That just looked desperate, and the markets took it as a sign of panic and a chronic inability to fix the problems.
When trying to intervene in currency markets, you really have to go full-measures, and the Indian Congress government doesn't seem to be able to do that. More importantly you need structural reforms to fix the economic fundamentals.