Exchange-rate and employment...

It would not be an overstatement that in the recent times foreign-exchange-rate policy is centered around exports, employment and growth. The pattern is present everywhere... US, Europe, Japan, China... Even the Make-in-INDIA initiative of the present government is a step in giving Indian export sector a push. INDIA’s export sector, especially manufacturing, is largely underdeveloped and there is a scope for employment generation with relatively low wages. The country so far has concentrated on domestic-demand for growth but now with greater emphasis on manufacturing and exports INDIA is likely to out-pace cooling China which is going through a slow down much like the Japanese and the US style, a deflationary bias in the economy... However, INDIA with a sound policy, even in the exchange-rate...  a little depreciated Rupee to give export and employment a chance... can take advantage of both the positions... An investment inflow and hardening rupee and investment outflow and depreciation... Increasing foreign-exchange reserves during inflows and hardening will help us weather too much depreciation during outflow and costlier imports and also increase our competiveness... Moreover outflow and depreciation will, again, increase export competitiveness. We should use our foreign-exchange rate policy for more productive employment and growth, it would be helpful as far as demand and growth (external and domestic) is concerned... The investment-cycle in INDIA too is soon to kick-in with interest-rate reduction... Good for exports... Depreciation and low interest-cost...