Modi is right. Don’t blame the rupee slide on world economy.

Administering the lie detector test to political grandstanding

"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."  Narendra Modi  at the Gujarat BJP executive in Rajkot on June 8

Modi is right. Don’t blame the rupee slide on world economy.

The Indian rupee tumbled and reached a new low at `56.40 per dollar. Reason? The world economy is tanking, the fall of Greece and all that. At least that’s what the Manmohan Singh government would have us believe. 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.

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, a full 1.66 percent less than the rupee. Bangladesh, nowhere near the eco giant that we see ourselves as, has not seen its taka stir an inch. In the BRICS nations, China, which we so love to compare ourselves with, faced only a 1.10 percent erosion of its yuan and Russia and South Africa have done far better than us. Of course, Brazil has taken a bigger knock than us, if that is any consolation. So, it seems Modi is telling the truth. The world is not to blame for the knocked-down rupaiya.