Reader Manish, from India, pinged me today regarding a statement made by India’s Finance Minister that the Right Value of Rupee is 59-60 to a Dollar
Asserting that the right value of rupee is 59-60 to a dollar, Finance Minister P Chidambaram today said that government will make all efforts, including extending priority sector status to export credit, to boost shipments. “We think that based on the REER (real effective exchange rate) value, that (59-60) is the right level of the rupee and it should not overshoot its mark.
Manish writes …
The Indian Govt knows the ‘right’ value of the rupee. How? Maybe it’s because the Indian Prime Minister is one of the world’s foremost economists. Perhaps it’s because our brilliant Harvard educated Finance Minister threw a dart on a board.
Anyway, I thought the idea was funny and thought you would too.
The “Right” Value in Pictures
Bureaucratic fools make proclamations based along the lines of what they want to see, even though they have no idea of the economic forces in play.
The notion that India’s Finance Minister knows the true value of the Rupee is idiotic, and Manish knew in advance that I would agree.
Here’s the deal: If governments worldwide would stop printing money and stop manipulating interest rates, we would find out in a flash what the true exchange rates should be.
Mike “Mish” Shedlock