Down down down the drain, the bloodied Indian Rupee's strain

In India, it's policies and it's people have yet again tumbled at a crossroad where none of them know which direction they should take.
This week, courtesy INR-USD Exchange rate. It touched an all time record of 1 USD = 58.65 INR today.

From 20th of May, somewhere around $10bn flooded out of the country after Bernanke's announcement. Only $20bn had flown in since Jan this year as FII (which was encouraging, alas!).

CAD would be around $21bn in May'13 (up from $17bn in Apr'13) making it fall in the range of 5.5-6% - a nightmare for a Govt which has already scared global investment community with its mindless policy decisions over taxation (ref: Vodafone case) and some more since last year.

RBI (Indian Central Bank) has been in pressure from the entire Biz community to lower interest rates and was to do the same in June/July'13, until now. Now in the light of risking to damage more outflow of Dollars from the country which damaging the Rupee rates further which in turn would increase inflation if it lowers interest rates (lower interest rates will encourage FII to move back to their homeland), it is handicapped to make interest rates any sweeter. This means no respite for Indian corporations which are already paying a BPLR of 15% even in a slowdown!

Again, as importers, all we can do now is to send God a short sms - "SOS!", only if his number was not coming unavailable.