Shape of you...and your currency!

The rupee has depreciated significantly against the dollar recently. Exactly why does the rupee fluctuate from 64 to 68 per dollar? This blog attempts to explain the determinants of the level of rupee, but not by any complex econometric methodology. Let’s make it simple and compare it our fitness. It is quite an interesting analogy actually.

Fitness	Rupee
When we exercise regularly we stay fit	When the economy performs well regularly the rupee is stable
When we have our diet 'in check' it keeps us healthy	When our inflation is 'in check' the rupee stays healthy
When we have sufficient sleep with less stress, health appreciates	When the country has sufficient trade balance with less import demand, rupee appreciates.
When our surrounding (i.e. friends and family) support us for staying fit, we are encouraged to perform better	When our country’s surrounding (i.e. foreign investors) support our country by investing through FDI and FPI, the rupee is encouraged to perform better.
On the fitness front, if any of these factors turn discouraging and negative, we lose focus, start gaining unhealthy fat and gradually get out of shape	On the rupee front if any of the above factors turn unfavourable and negative the rupee gets unhealthy and gradually depreciates.

With the above factors, our health and the rupee gets better or worse gradually. However, there are also shock factors which drastically change our health conditions. Similarly there have been temporary and permanent shifts in the value of our rupee as well.

If someone meets with an accident/ fracture or is bed-ridden for couple of months, they might gain weight excessively.	The financial crises in 2008-09 depreciated the rupee sharply by almost 17% to Rs.48/$.
Also, in cases where someone is suffering from a chronic disease, as side effects of medicines etc they might gain unusual weight.	The European debt crises in 2011 followed by India being part of the fragile five (high fiscal and current account deficit countries) led to another 25% depreciation in the rupee to about Rs.61/$ by 2014.

Let us now look at the other extreme. Remember the size zero craze or the madness of artificially reducing body fat? That didn’t work well either. People soon realised that such methods are only going to harm their bodies in the long run. We would be at our best, when we stay energetic and feel happy about our body. We must only try to achieve our ideal fitness level and maintain it. Similarly if the rupee appreciates way too much, it would be harmful for the exports competitiveness and the country in the long run. The rupee would be at its best if it is closest to its fair value and then the RBI and the Government aim to maintain it near that level.

Disclaimer: Views are personal. The only idea here is to make economics of currency relatable and easy. There can be many more factors which affect our health and also our currency, I have just tried to cover the important ones.

When living in India is a choice!

Here's a quick background. I am an Economist by profession, married and a mother to a toddler. My husband is currently in the U.S. for a project. I am bombarded by questions every now and then as to why "I am not taking advantage of this golden opportunity to settle down in the U.S. for good".

I have studied and worked partly in the U.K. and also accompanied my husband in his previous stints outside India. I am well aware of the many advantages of staying abroad. Nevertheless, we have decided to settle in Mumbai, India.There are many versions and perspectives to look at this. So here's my view:
5 reasons why we chose to stay in India :

• Financially sound: After working hard for many years both of us now earn decent enough to live a peaceful life in Mumbai. We have bought a house on a huge EMI. We (5 members including my in laws and my baby) absolutely love the house and do not wish to sell it. Settling abroad will mean paying for double establishments; the EMI plus other bills in India and rent plus utility bills abroad. Being new parents we also need to arrange for future education expenses of our child So, financially it is actually not beneficial for us to settle outside India now. 
• Rewarding career: In my everyday work, I get to implement the things I have studied. I enjoy my work and look forward to Mondays. Over the years I moved up the ladder in the quality of my work. Of course I have my share of problems with work- life balance, office politics, travel issues, working mother issues etc. But I am constructively working towards finding solutions and improving on areas which are in my control. Sooner or later I will be in a better position than today. Personally, by working as an economist in India, I can see a bright and stable career graph. This graph will see a steep fall on settling abroad.
• Comfortable and good standard of living:  As mentioned earlier, after years of hard-work, we have earned the comforts of 'roti-kapda-makan'. We also have the luxury of maids, like most Indians do. In spare time we also pursue our hobbies (I have a lot of hobbies and seriously pursue them). To achieve all this in another country is not impossible but will surely take a lot of time, which we don't wish to invest anymore. In addition, increasingly there's a lot of uncertainty in obtaining green card/permanent residency. Finding a new job, a new school, a new house after every few years is not our cup of tea.
• Family and social life: My husband and I have always liked staying with family and enjoy meeting friends and relatives at frequent intervals. We stay in a joint family. My parents too stay in the same city. Our parents are our biggest support system and a strong positive influence on our baby. As our parents get old, we want to be closer to them. In my case, being the only child I want to be available for my parents always. Staying abroad takes one far away from this point. Many of our friends and relatives who stay abroad often cite these concerns. As we do have a pretty good option of staying close to parents without sacrificing a lot on personal front, we opt to choose that.
• Indian baby: We would like our baby to grow up among all of us together and take basic education in India. Later, he can take higher degrees in any country of his choice and settle down where ever he wants.

 To sum up, financially,  practically and emotionally we are happy to be in India. There are a lot of problems in a developing India, but even developed countries have their own set of issues. There are pros and cons of staying anywhere in the world. In all these reasons I have always mentioned words like 'our choice', 'our wish' etc reflecting that its purely a personal choice. In my view, settling down in any country is an individual choice. Once we make a decision and accept it, that place becomes home.

P.S.- To my friends and family staying outside India:I love you all and proud of the decision you have taken as it best suits you. I am not against anyone settling down outside India, Views expressed here just portray what best suits to me and my family.