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The fact that Indian exporters do not have pricing power in the global market and that they had to rely on the rupee's artificial weakness (courtesy the central bank) for profits is disheartening. The recent move by the RBI of hiking the CRR and interest rates to control inflation has already pushed ordinary loan-takers to the wall. I think it is again the common man who is paying the price for the apex bank's handling of the exchange rate that has resulted in the current inflationary situation.

It is time the RBI moved out of the forex market completely and allowed the rupee to be market-determined. By keeping the rupee artificially down, it is only encouraging a false sense of confidence among exporters, which is not sustainable and which also allows for inefficiencies to creep into export-oriented industries.

Deepomouli Ghosh

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