The Forex Conspiracy

India and china were the two economies the World was watching with bated breath as the two asian giants almost wiped the economic unrest that the west was groping with in 2008/09.
The fag end of 2011 saw the Euro crisis rattling the economies of Italy, Greece, Portugal, Spain and France with Germany being the sole exception and that too barely managing to stay afloat amongst these drowning European nationalities. The crisis soon engulfed the Asian Countries and all the hyped up feelings about the north bound growth rate suddenly changed both, gears and direction southwards. The rating firm-Standard & Poor swung into action and downgraded the ratings of most of the countries and all the positive vibes disappeared and the dark clouds of recession and economic unrest soon gathered storm with the immediate future looking grim and bleak.
The IIP(index of Industrial Production ) figures too were suddenly trimmed by the govt. but was not negative and so was the case with the projected annual growth rate.
The rupee rose to an alarming Rs.54 from a stagnant Rs.45 to a $ (a rise of almost 18% in 6 months) and was expected to breach further north to unprecedented levels before pressure from economists and other rational individuals prevailed on the Govt. to act and resort to measures to arrest the freefall.
The bank deposit rates for non Residents generally varies between 0.2% to 3.20% in most of the western countries .The Indian Govt. recently raised the interest rate from 3.25% to an astounding 9.75% and already an estimated 15 billion dollars is waiting in the wings to be pumped into the forex kitty .
The repatriation has already gained momentum and there is a mad frenzy to cash on the once in a blue moon offering. The rupee is in a buoyant mode at 50 to a dollar and is expected to be stabilize around 46/47 in the next few months barring any major industry growth rate hiccups.
The RBI did not intervene(obviously at the behest of the Govt.) when the rupee was struggling to keep afloat with major imports like crude which was getting costlier,the crude hike meant higher inflation so on and so forth. The immediate beneficiaries were software Majors like Infy, TCS, HCL Tech and Wipro which showed in the 3rd qtr. results posting remarkable margins reaping the benefits of the enhanced foreign exchange rate.
India never had a favourable balance of Payments Position since 1947.With time the gap between the export inflows and import outflows has grown from a CHINK to an ABYSS. In 2008 when the rupee gained against the dollar and the rate was almost 39 to a dollar the RBI intervened in a haste and sold dollars to prevent the rupee from gaining further momentum. The Govt. said that the move was essential to cushion exports from getting costlier and eventually turning negative.
On a similar note the imports were getting cheaper including Crude-i.e. our biggest cash outflow was curbed and barbed naturally. Exports would materialize at any level if they are of superior quality and sourced at cost effective and competitive rates rather than depend on the fluctuating exchange rates often controlled at the whims and fancies of the govt.
No one has any clue as to why no measures were initiated by the authorities to curb this abnormality at the onset.No other Asian Currency nose dived (whatever be the economic condition they are in) visa-vis the Dollar during this period,hence the inaction is not only petrifying and unjustified but smacks of some deep rooted conspiracy or some tacit understanding with the US authorities for fulfillment of some vested interest.