Article;
Subbarao needs a bazooka not a squirt gun.
Comment;
As far as FIIs are concerned they also must be hedging themselves against falling rupee as people hedge them against inflation by investing in gold. The issue with these investments is that the returns are subject to decrease in total value as the time passes because prices may rise faster than income. It is profitable to invest in India where interest rates are higher and spend that money in the US where inflation is low. Interest rates are higher in INDIA compared to the United States. This is also profitable from the point of view of micro saving and investment. US citizens should invest in INDIA. They can earn higher interest rates by living in a low inflation country…
As far as FIIs are concerned they also must be hedging themselves against falling rupee as people hedge them against inflation by investing in gold. The issue with these investments is that the returns are subject to decrease in total value as the time passes because prices may rise faster than income. It is profitable to invest in India where interest rates are higher and spend that money in the US where inflation is low. Interest rates are higher in INDIA compared to the United States. This is also profitable from the point of view of micro saving and investment. US citizens should invest in INDIA. They can earn higher interest rates by living in a low inflation country…
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