Currency Wars: India's central bank could intervene to "fix" the strengthening Rupee
The one thing the world thinks it knows that just aint so is the idea that a weak currency is good for a country, as if the exporters are the only folks who create jobs. Geithner and Bernanke don't seem to get it. Strong currencies are good for the economic well being of a country. Right now, Ben Bernanke et al, seem to want to take us to an inflationary future, where are home values are falling in real terms but staying flat in nominal, via Bloomberg:
India’s central bank may intervene to weaken the rupee and protect exporters if the currency appreciates past 43 against the U.S. dollar, a finance ministry official with direct knowledge of the matter said.
The government is comfortable with the rupee trading between 43 and 45 to the U.S. currency, the official said late on Oct. 15, asking not to be identified because the issue is sensitive. The local currency fell 0.4 percent today to 44.29 per dollar as of 3:42 p.m. in Mumbai today.
The rupee has climbed 3.5 percent to be Asia’s second-best performer in Asia outside Japan in the past month as foreign fund flows into the nation’s surging stock market reached a record $23 billion this year. India would join countries from Japan to Brazil that have sold their currencies to keep exports competitive as the global recovery loses momentum.
“Global demand is already weak and many are starting to intervene,” said Sonal Varma, a Mumbai-based economist with Nomura Holdings Inc. “We won’t be surprised if the RBI did start intervening before 43 as well.”