Letter to BS: Low rupee adversely affecting prices of essential commodities

This refers to the editorial “Let it fall” (September 5). The continuously falling rupee, though beneficial to the exporters and the non-residents, is adversely affecting the prices of the essential commodities adding hardship to the wage earners. The government’s intervention is needed to stabilise the value of the rupee. The cascading effect of rising fuel prices is hampering the growth of the economy and the rising inflation is negatively impacting household savings which is crucial in augmenting investment, production and distribution.

Considering the inflationary spiral, the Monetary Policy Committee needs to look for a hike in the policy rates without waiting for the scheduled meeting in October. Imports are turning costlier and it is widening the current account deficit. The government should not leave the rupee to the market forces to settle its value against the dollar. The central and state governments must look for shedding some portion of its taxes on fuel to contain the rising fuel prices, lest it accelerates inflation and lead to more unemployment. The spillover effect is negatively impacting the recovery and resolution of banks’ bad assets. Both the government and Reserve Bank of India should intervene without delay to stabilise the economy.

V S K Pillai Kottayam

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