USD moving up V/s. Rupee Going Down. Social Media Message is not talking about the TRUTH

 19^th October 2022

USD moving up V/s. Rupee Going Down. Social Media Message is not talking about the TRUTH

Dear Fellow Investors,

Namaste! Recently, the Finance Minister had given a statement that the Rupee is not going down. The dollar is Moving up. Social Media is full of messages proving her point as the right. I got the same message from 5 different regular readers of my blog. Maybe they wanted my input on the same. Let us see the EFFECT first.

What is the EFFECT?

Say a Knife falls on the APPLE or APPLE falls on the Knife. In both cases, APPLE will be cut. The knife will have no effect. So, whether the Dollar is moving up or the Rupee is going down against the dollar – in both cases – Indians are suffering the inflationary effects.

The social media has compared the rates of the Pound / Euro and Yen rates against the Indian Rupee from last October to this October and concluded that the Rupee has gained against them and its just that the DOLLAR is moving up due to interest rates, Rupee is suffering. They have quietly missed YUAN and other currencies.

Let us look at the FACTS: -

In the last 10 years – Indian exports have been in the range of USD 400 Billion to USD 600 Billion. Indian Imports were in the range of USD 600 to USD 725 Billion. It means our imports were always more by USD 150 to USD 200 billion in the last 10 years.

So, whether it was CONGRESS or BJP (since 2014) – nothing much has changed to increase the Exports from India. Exports were relatively standstill in the last 10 years.

Thanks to Government policies – entrepreneurs are going out of India and settling there. The Richest number two Indian is going to Singapore. The educated class is also preferring to go out of India and work in some MNCs. So, throughout, the last 75 years or more – India has been exporting the BRAIN CAPITAL of the country. The same brains are being used by MNCs and they are exporting their goods to India. And after Make in India and tons of FDI, our exports are not moving up. 

When Exports are not more than Imports – the Indian Currency will go down. We don’t need a Ph.D. to say the same.

What about CHINA?

The social media message has missed CHINA's currency with the DOLLAR in the last year. It was steady. Though the USA has a cold war and they are finding one or the other reasons with the CHINESE policies – they are not able to do anything big for CHINA. Why? China is their FACTORY. Without CHINA – the USA can’t survive.

Now, the politically biased person will say CHINA has steady currency rates and it is not decided by the Market flow. Yes. But, how come CHINA is able to pull on this UNFAIR practice with the USA? Why USA allowed it? Because CHINA is useful to the USA in more than one way.

It’s a painful fact, that we are not producing something which is a must for the USA or meaningfully important for the USA except for our IIT and IIM graduates.

What is the GOAL of this discussion?

When a politician realizes that they are not effective in addressing the problem of the country – they play with the words and normal people have tons of time to discuss and forward the messages. I remember a politician who lost his deposits in an election arranged a speech. He said – “I have not LOST the ELECTION. I have been MADE TO LOSE by the opposition”. You can’t beat the politicians when they start playing with the words.

The main problem is we have not been able to find out something meaningful to export in terms of VALUE and in terms of MASS APPEAL to the world at large. China has PIN to PIANO kind of set up and we are in the process of copying the same. Here also, we are not using out-of-the-box thinking. There was much fun fair about the news that APPLE is setting up some factory in SURAT in the last week. Now, that’s not a very value-added business they are doing. What they were doing in CHINA – they are doing in India. Simple.

We need to come up with something of our monopoly or something which is unique to Indian turf.

I am sure MODI JI will find out something or the other by the time of 2024 election manifesto is decided or at least we will be promised something related to that. Modi Ji is super creative. In 2014 – he gave a slogan of ACCHE DIN. In 2019 – it was SABKA SAATH, SABKA VIKAS. In 2024 – something new will come. So, relax and enjoy.

What do you need to do?

Remember my example of APPLE. You are affected and will be affected in the coming times due to their way of playing with the words rather than addressing the core issues. They will come, play with the WORDS and Go, but the real effect will be suffered by people like us.

Focus on your JOB / BUSINESS or PROFESSION. If you have spare money – take the help of a personal investment consultant and invest your money and prepare for the coming time.

I wish you all the best.

Follow me on Twitter @hiteshmparikh / WhatsApp -+91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.