Economic superpower India competes with Bhutan

Modi is right: Almost all neighbours are doing far better on currency front

GN Bureau | June 11, 2012



The Indian rupee tumbled and reached a new low at Rs 56 per dollar. Reason? The whole world economy is going down, and think of Greece, and all that. That’s what the Manmohan Singh government would have us believe. Yes, we thought, the after-effects of financial meltdown and the global recession and so on.

But leave it to Narendra Modi to do a little math. He found that the currencies of our neighbouring countries are not depreciating as much as the rupee has been. On Saturday, he said at a BJP meeting in Rajkot: 'The prime minister should explain to the people of the nation as to why only the Indian rupee is depreciating while the currencies of the neighbouring countries are not facing such a challenge.”

Then we did a little math, and found he is right. The chart below shows currency values for the South Asian nations over the past four months. In this region, only Burma’s kyat has gone down by 23.90 percent, otherwise our nearest competitor is Bhutan whose currency ngultram has depreciated by 11.34 percent.

Indeed, China which is usually paired and compared with India, has faced only 1.10 percent erosion in the value of its yuan. Bangladesh, not a minor player in world economy, has hardly been affected by the downturn or whatever it is.

Meanwhile, a comparison among the BRICS nations -- India is usually compared within that -- shows that while brazil has taken a bigger knock, Russia and South Africa have weathered the storm better, not to mention China again.

So, who is to blame for the knocked-down rupaiya?

How South Asian economies have fared

India — 1 USD = Rs 56.40 — rate four months ago — Rs 48.98 —13% depreciation

Pakistan — 1 USD = Rs 94.25 — rate four months ago — Rs 90.94 —3.4% depreciation

Bangladesh — 1 USD = 81.93 Taka — rate four months ago — 81.65 Taka —0.34% depreciation

Burma — 1 USD — 841 kyat — rate four months ago — 640 kyat —23.90% depreciation

Sri lanka — 1 USD = 130.850 SL rupee — rate four months ago —119.870 SL rupee — 8.39% depreciation

China — 1 USD = 6.36 yuan — rate four months ago — 6.29 yuan —1.10% depreciation

Bhutan — 1 USD = 55.25 ngultram — rate four months ago —48.98 ngultram — 11.34% depreciation

Thailand — 1 USD = 31.57 baht — rate four months ago — 30.33 baht — 3.92 depreciation

Singapore — 1 USD = 1.27 Sing dollar — rate four months ago — 1.25 Sing dollar — 1.57% depreciation

Comparison among BRICS nations

1 USD = 2.02 Brazilian real — four months ago — 1.70 real — 15.84% depreciation

1 USD = 56.40 Indian rupee — four months ago — 48.98 rupee — 13% depreciation

1 USD = 32.59 Russian ruble — four months ago — 29.17 ruble — 10.49% depreciation

1 USD = 8.34 SA rand — four months ago — 7.59 SA rand — 8.99 depreciation

1 USD = 6.36 Chinese yuan — rate four months ago — 6.29 yuan —1.10% depreciation

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