I think that it is time to stop gloating about our rise in forex reserves. It is a lot like a company rejoicing over its cash in hand rather than sales. Having a big bank balance is good, but beyond a point it is better to either reinvest it or to return it to your shareholders. Similarly, I think that now we are reaching the point where our forex reserves are an unproductive assets. It is now starting to hurt our software and BPO companies and exporters in general. The obvious solution is to allow free import of consumer goods, bringing down inflation even further.
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Check this out – Foreign reserves are bailing out the US government
from Rediff
The rising Rupee & foreign reserves
Edward Hugh over at BonoboLand has a good analysis of the implications of a rising Rupee.On the rising Rupee: The underlying difficulty is due to what Andy Mukherjee calls the `Impossible Trinity’ (this expression was, if I am not mistaken, coined by P…
Leave those foreign reserves alone
The Indian government is seeking an easy way out on infrastructure funding
India’s infrastructure is a bottleneck. The good news is that Manmohan Singh’s government has realised this and intends to do something about it. Prime Minister Singh himse…