On Rupee vs Dollar, PM Modi’s performance trails Manmohan, as of now
Over the last 2 odd years, the economy has been trending downwards due to many internal and external factors. COVID in that sense came at a very bad time as many thought that Q4 2019-20 was going to be the bottom for India. However COVID and lockdown have complicated India’s already difficult situation.
India’s currency suffered as a consequence and at the moment, on US Dollar vs Indian Rupee, when annualised, PM Modi is Underperforming the Ex-PM Manmohan Singh. Under PM Manmohan Singh, India lost 31% in 10 years or about 2.8% a year, Under PM Modi, it is about 4.1% a year.
Manmohan Singh was fortunate that the Global economy saw the greatest expansion between 2004 and 2009 giving the economy a huge boost. PM Modi was fortunate that Crude Oil prices have been extremely low, reducing the burden on India’s forex. Under Manmohan Singh, India went on a spending binge after 2010 which coincided with a crude oil price shock plus global food inflation which severely hurt the Indian Rupee. Under PM Modi, the Indian economy struggled after the twin blows of Demonetisation and GST and has been trending below 5% now, leading to a weakness in the currency. Not just India but most Global currencies have struggled against the dollar recently. It needs to be seen how the Rupee plays out after the stimulus will be announced