Letters: A currency's strength

This refers to the editorial "Manage a depreciation" (October 16). A currency must have intrinsic strength which is derived, among others, from the quantitative, qualitative and price competitiveness of the export basket catering to the emerging international demand and prospect of growth in a stable governance environment. Therefore, invasive manipulation of the exchange rate for better price competitiveness of exports may not lead to the desired outcomes on a sustainable basis. Besides, this will invite further retaliation from competing nations.

India's balance of payment (BoP) suffers from inherent structural imbalances and, therefore, is prone to minor shocks in sensitive sectors. The structural correction has not been attempted in right earnest for a sustainable solution. Among others, increasing crude oil-based energy demand, low factor productivity and higher elasticity of import demand need immediate attention to attain a sustainable BOP position, consistent with the overall growth target.

Biplab Chakraborty Kolkata

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