by Julian D. W. Phillips, Gold Seek:
In 1991, the Indian government pledged the nation’s gold reserves against foreign loans that were provided to the nation from international sources. So they have already trodden the path of using gold to support their international presence and in international dealings.
The Indian Rupee exchange rate continues to decline, and far faster than other currencies. Over the last couple of years the Indian Rupee has fallen from Rs.42 to the dollar to the current rate of over Rs.63 to the dollar. While this reflects, in part, the withdrawal of ‘hot money’ (carry trade investments taking advantage of interest rate differentials between the dollar and the rupee) from the country, it also reflects the waning confidence in the Indian economy –although it continues to grow at over 5%—and its currency. The Balance of Payments continues to worsen.
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