Keep the dollar flying – Newspaper

 Keep the dollar flying – Newspaper

KEEP the dollar flying (ie keep it relatively expensive). Why? Why not keep the rupee flying (ie keep it relatively overvalued)? There are very simple reasons to prefer the former approach over the latter to keep our economy flying, rather than having a crash landing. To understand the reasons, imagine you are a businessman with two choices. The first choice is to start an import business. The second is the export business. Which one will you choose in our country? Import or export? Many will choose (and are still choosing) the import business because it requires little investment and is much easier to set up. Very few will choose the export business because it requires huge investment and is difficult to set up. Is it too difficult to see this ground reality? This is one of the primary reasons to keep the exchange rate more favourable for exporters. Keeping it consistently more favourable for exporters also helps producers, thereby…

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