With the rupee crossing 69 to the dollar, several experts are of the view that it can go even below 70, given how the dollar is strengthening against all currencies, as well as the condition of the country’s macro-fundamentals. Apart from the slowing in both FDI and FII inflows, as Delhi-based macroeconomist Renu Kohli points out, there has been a dramatic slowing of both India’s software earnings and remittances from Indians overseas. Software earnings grew by around 24% per year in FY02-12 and this crashed to 2.9%, while remittances growth slowed from over 16% to a mere 0.1%. Given this, the rupee’s weakness should not really come as a surprise; indeed, the NITI Aayog’s vice-chairman has said the rupee is still overvalued.
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