Indian rupee shows no signs of reversing its slide as Asia's worst performing currency as hyperinflation and inaction of central bank plagues Indian economy
Babu Ghanta
Jun. 23, 2008

Reserve Bank of India raised its interest rate after 15 months. The central bank’s action is as ineffective as the finance ministry that never understood the intricacies of Indian economy in the first place. Indian rupee today is worst performing currency in Asia. After falling 6.5 percent this quarter against the dollar, Rupee continues to fall further.

International investors like Pictet Asset Management Ltd. and Aberdeen Asset Management Plc are eager to leave India quickly dumping all Rupees denominated assets. But it is not easy for these international India enthusiasts to leave the Foreign Direct Investment and outsourcing black hole of the universe.

Simply put what goes into India and China never comes out. It took ten years for American and European financial institutions to understand that.

The hyperinflation in India and inaction by the central bank (Reserve Bank of India) is killing the Indian economy.

Rising oil and food prices caused wholesale prices to rise more than 11 percent in the first week of June, the most in 15 years. Inflation is eroding spending power in India. International Monetary Fund and the World Bank estimate about half the Indian population of 1.1 billion struggles to survive on less than $2 a day.

At the same time some are buying two or three cars on credit hoping the superficial economy will reach heaven.

Indian rupee shows no signs of reversing its slide as Asia's worst performing currency as hyperinflation and inaction of central bank plagues Indian economy
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Reserve Bank of India raised its interest rate after 15 months. The central bank’s action is as ineffective as the finance ministry that never understood the intricacies of Indian economy in the first place.
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