First do not try to judge whether a person can afford such education or not. That is none of any one business. Asked a question, if possible answer and do not be judgemental and never asked whether the person can afford or not afford. None of any one business.
yeah higher education and not attending KG 1 class.
Did the query ask this? If I want to I will not be asking such question in this forum, I know places where I can correct info.
After reading the above, just do not feel like reading anything else.
There is no judgement being passed.
Please try not to read beyond whatās written.
This is a statement made in this context as
the explicit reason offered was for higher education in the US
a claim was made that fixed-costs overhead are significant at small amounts of foreign investment.
These 2 statements seemingly contradict each other
as they are referring to vastly different sums of capital involved.
(of course, in my opinion)
Which is what the post called out.
So please go ahead and clarify (if any)
The post went ahead and shared one plausible explanation.
Micro-investing and so forth.
Is that the clarification that resolves what is otherwise a contradiction at first glance?
Unfortunate if you stopped reading right there.
Because thatās exactly what was written immediately after -
@neha1101 Absolutely! Itās your prerogative to choose what you read/ignore,
and for me to keep in mind in future
to decide how to balance the advantages of being direct/blunt vs. the challenges involved.
I sincerely hope that it helps you to know that
there is no judgement being passed in the previous comment above
and whatās written are generic statements not directed at anyone in particular
Sharing the above with the hope that
it enables you to re-read the same comment without taking offense / being triggerred
and respond with your thoughts on the aspects being discussed.
That is because we donāt produce gold, but import it. Gold is the biggest contributor to our trade deficit after Crude.
While we can be proud of having the highest household gold in the world, it comes at a price āthe depreciation of INR.
True, but by trying hedge ourselves against the fall of INR, we are indirectly contributing towards its fall, by investing in USD denominated assets and importing gold, etc.
Personal interests often conflict with the national interest. This is what i was trying to convey.
China is an Enigma, an outlier.
They are the biggest exporter in the world, with trade surplus exceeding $1 trillion, that no other country can come close to.
And obviously, by being the biggest exporter in the world, they intentionally want to keep their currency depreciated/stable to look attractive/cheap for export.
We canāt compare a Net importer with a biggest Net exporter and say, why canāt India defend itās currency like China.
Come on! Do you seriously believe their economy is anything worth comparing with India.
Sure, they seem to be have a stable currency in the recent time compared to INR, but all of this is temporary and not to forget, this stability is mostly funded by borrowed money from IMF. Nothing to be proud of.
Relative Stability vs. Absolute Value
INR Stability:The Indian Rupee is considered more stable because its depreciation is usually gradual, driven by market forces, and managed by a large foreign exchange reserve (over $600 billion). Indiaās central bank uses a ācrawl-like arrangementā to manage volatility.
PKR Volatility: The PKR often experiences sudden, sharp devaluations. These are frequently triggered by balance of payments crises, high inflation, and reliance on IMF bailouts rather than organic economic growth.
The Comparison: When people perceive āstability,ā they may be referring to short-term, artificial, or managed rates during IMF programs, but the long-term trend shows high volatility in PKR compared to a more stable, albeit slowly weakening, INR
The RBIās stance of not wanting to intervene/curb the fall of INR due to short-term volatility seems rational, even if it not popular. It is easy for the RBI to intervene and stabilize the INR now, but that may not be the most prudent approach. i.e., Long-term stability over short-term gains.
Here is why the RBI does not use its reserves to fully protect the rupee:
Depletion of Reserves: Aggressively defending the rupee, especially during intense US dollar demand, can lead to a rapid depletion of forex reserves, leaving the country vulnerable during genuine crises.
Market Forces and Sustainability: A long-term devaluation is usually driven by strong fundamentals, such as a strong US dollar, capital outflows, and inflation differentials. The RBI cannot fight sustained global economic trends permanently.
Encourages Speculation: Excessive intervention can make the currency a target for speculators. If traders know the RBI is defending a certain level, they may short the currency, forcing the RBI to spend more to defend it.
Managing Volatility Over Price: The RBIās policy is to curb severe volatility and ensure a stable, smooth depreciation rather than defending a āline in the sand.ā They allow the market to determine the rupeeās value to ensure export competitiveness, as a weaker rupee makes Indian goods cheaper abroad.
Economic Consequences: Attempting to prop up the rupee with reserves reduces liquidity in the local money market, which can negatively impact monetary policy transmission
Why are we trying to hedge? Itās because the value lost is apparent. This is also one of the main reasons, why people buy Gold, which leads to gold imports. If the government was competent enough to slow the rate of fall(or stop) by decades long organic approach(not the shortcut of RBI selling dollars) like improving ease of doing business and reducing compliance and taxes, no one would be hedging. You canāt just put the onus on the ones who are trying to hedge instead of government and itās decades long crony capitalism policies. Government has to reap what it sowed:
