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Commentary

This Week's Random Conspiracy Theory

…is that the RBI will not let the dollar devalue against the rupee, regardless of inflation figures, until May 22.

Because that’s the day the Karnataka elections are over. Karnataka has a lot of exports – not just IT, which is what makes it famous, but also textiles, granite, lots of different types of ore etc. A dropping dollar will threaten all these people’s jobs, and something done today may adversely impact elections, no?

At least it will ensure that the Congress stays out of power. And that is a no-no. The problem is what to do when prices of food items are so high? I think that will require a lot of scratching of heads, but I don’t think there’s any solution except to let the dollar go, eventually. The FM routinely gives excuses about how they will stabilize, but they will not, as long as we have this ridiculous dollar-rupee equation.

Of course, my theory goes further. Not only will the dollar slide after the 22nd of May, it will do so without warning from the RBI or anyone else. The reason will be some international reason like too much money coming in, or that our markets are buoyant (which they will be). Warning means too much explanation and too many people trying to do stupid things like speculating on derivatives which they don’t understand. But this isn’t just no-warning. This is actually going to be saying “we’ll protect the dollar at any cost” and not doing so, stating reasons for the lack of protection as something else. The CNBC commentators will be having wet dreams about this kind of day.

That’s also the reason why there should not be a stock market crash before then. But Karnataka is not so stock-market-dependant so that cannot be inferred…still, a party does not want any negative news during elections, and the Congress will do whatever it can.

That’s me getting off the political pedestal, and going back to reality. Please note that this is a random conspiracy theory, and should not be taken seriously, but it does refer to people dead or alive. It’s just me having some fun.

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