Column Inconvertibly dull

Font Size

Print

Feedback

Email

Discuss

A leading public sector company recently ran a big advertising campaign in the metros highlighting its annual turnover as a global player. What should surprise viewers is that the company has mentioned its turnover for an audience in India in US dollars only.

The advertisement is a neat enough indicator of how the rupee as a currency is gradually beginning to slip away from the radar of even Indian trade and business. No company in India now speaks of its numbers in rupees. Just as the public sector power company assumed on the billboard, the currency for dialogue within the economy is the dollar. So, even an average Indian citydweller is quite comfortable with the dollar when it comes to comparing the respective size of Indian companies on a billboard. He does not need the support of a rupee-based measure to do an effective ranking.

This is the result of the years of hothouse treatment of the rupee, which has neatly eroded its presence from the high street of global finance. Just notice, in any quarter as the corporate score cards tumble out, all listed companies including those which have very little exposure abroad and, of course, the big unlisted entities spell out their balancesheets in US dollar, following it up with the rupee. This has become so pervasive a shift; it has effectively demonstrated the impossible odds for the rupee to emerge as a possible global currency.

This was bound to happen. The rupee has failed to keep pace with the speed at which the economy has matured. Several columnists have argued from this forum about the need to hurry up with reforms in the forex markets, including setting up institutional mechanisms to trade in the rupee as well as broadening of the market for it to allow global entities to trade in it. That agenda has taken so long in coming through that it seems quite unlikely that the domestic entities would find the effort worthwhile to participate and thereby nurture the market for the rupee.