Rising prices of oil, depreciating value of rupee is right now the talk of the town. Everyone is attacking Prime Minister Narendra Modi and his Government for increase in price of oil and falling value of rupee. The opposition is giving more fire to the matter and is trying to malign the image of Prime Minister and his Government.
People are feeling deceived by PM Modi Government and demanding answers on the silence of PM Modi Government regarding these issues.But. wait don’t be too quick to respond negatively. To all the offenders who think PM Modi Government is sitting silent on this, I want to convey No you are wrong, PM Modi Government is not sitting silent on this but continually working hard to resolve the issue and finding a viable and long term solution so that it would not affect the nation in any way
But you all must be wandering how PM Modi Government would deal with it? What strategy PM Modi Government is going to follow to stem the rupee fall
The Strategy of PM Modi & his Government
PM Modi & his Government had sought a review of payment terms with major oil producers so as to provide temporary relief to the local currency. The Government is trying to make all the major oil producers countries agree to trade in local currencies rather than dollar which will strengthen exchange rates of their currencies in comparison to dollar.
Along with that, the Government is in talks for barter exchange trade with many oil producing countries to save foreign exchange. Under the barter exchange system India will export particular item in exchange of product being imported from that nation. Barter System is actually the process in which we give something in return of something we receive.
India is already following the barter system with the Union of Soviet Socialist Republics and is now also going to follow this system with Iran from November this year.PM Modi govt will exchange rice for oil it is getting from Iran. Also the payment with Iran will now be done by India in rupees not dollars which will give a new life to rupee
PM Modi Government is pitching for the same with other nations also.
If Modi Government’s this plan will become successful and the major oil exporting nations like Venezuela and Russia agree to trade in local currencies, it will strengthen exchange rates of their currencies as well as rupee in comparison to dollar. Trade in local currency and barter exchange will help India as well as trading national to save foreign reserves
Further the commerce ministry is considering options of increased exports and reduce imports through hike in tariffs to stabilize rupee. Commerce minister Suresh Prabhu asked eight departments including economic affairs, petroleum, steel, coal, electronics and information technology and pharmaceuticals to ramp up production in order to promote economic growth and address our merchandise trade deficit
Dollar is currently dominant medium of exchange for world trade. Many small countries have pegged their exchange rates to dollar. But if PM Modi Government’s plan will become successful, it will not only strengthen the rupee but also will serve as setback to United States which uses dollar’s domination as bullying tool to force other countries to follow its will. This plan of non-dollar trade could be a solution to many problem countries like India are facing.
Source : RightLog