Currency Volatility

The valuation of currency with respect to other currencies has a monetary as well as psychological effect on the community of investors, borrowers and consumers. A continued depreciation over a prolonged period of time  starts hurting even the exporters who are usually the only ones celebrating the downward trend. Such a situation puts all eyes on the Central Bank which is considered  the competent authority to manage the situation. Then the corrective cycle commences with a series of measures including the  raising of duties to reduce imports of high value goods, reducing liquidity in the market, raising the interest rates & so on....

It is possible to manage the short term fluctuations  through these interventions. However, if the problem is deep rooted, then fundamental issues have to be introspected. The exchange rate concept came into existence to facilitate the monetization of international trade. If trade is suffering , so shall be the fate of the currency. If trade has to flourish, it has to be be supported by a comparative advatange of the nation based on specialization /efficiency/promotion by the State/pioneering advantage/geographical clustering/ innovation.
Countries are counting on manufacturing exports, knowledge based project exports to revive their economy & currency. The role of inward foreign direct investment for establishing trade operations in host economies also has a great impact on the currency value.

Besides this, the other major contributor to fall in the value is inflation. The industrial production has to be strengthened so that the availability is ensured at the right time & the right place. It is difficult to put restrictions on consumer demand in democratic nations, but attractive investment options need to be advocated to the customer.

Governments may also create a crisis situation for the currency by borrowing to manage fiscal debt. This leads to downgrading of sovereign credit ratings not helping the currency valuations at all. The State has to prove capable of managing industry cycles, political & civil unrest and any other issue that bothers the market before the currency value falls.

Since most nations have adopted managed float as the exchange rate regime, the central bank & the State have to take sometimes hard measures to ensure stability. The management of the euro vis-a-vis dollar during the collapse of central banks of nations is really noteworthy. What remains to be seen is how industrial activity can be mobilized to control inflation and increase forex earnings to continue to keep the euro stable over a long period of time. 

Cultural Differences

Hello friends!!

Culture is like the binder in the organizations. If attitude is to be chosen over skills, many of us will choose the former over the latter while forming our project teams.That does not lead to solutions always.  Do we really understand or rather tolerate cultural differences ? In this era of interdependent economies, can we really stand fast in our own cultural silos?

Culture is shaped by both the known & unknown forces. Familiarization can help & so can the buzz of being a global citizen. Job rotations across continents , training programs on cross-cultural literacy are already helping. Creating a global mindset requires to let go off the cultural stereotypes starting with elementary things in an individual's lifestyle.

Hostede's cultural typology creates segments culturally  based on parameters like individualism, power distance, time orientation & so on... However, when it comes to actual working environment many of us may not actually remember these categories & create cultural profiles of our co-workers. This may result in lower levels of participation & mutual trust, acceptance of etiquette & intent of co-existence.

Ethnicity, political history, economic disparities between nations also influence work environments some of them being tied up to the spirit of nationalism. These complexities can only be reduced in the long run through sharing of workspace with a positive attitude. 

Cultural tourism is fast catching up reflecting the scope of diffusion & acceptance. However, illegal immigrants can be a roadblock here. Re-routing of jobs across borders can be a contentious issue again. 

These aspects have to helped through a political agenda. 

Hoping we all are aware & receptive to the differences .....

Hello friends!!

I recently read an article by the founder-director of a seed fund company who listed out strategic building blocks for conceptualizing a successful billion dollar start up in India. Then I read a blog by a dear friend as to how Indian State authorities are obsessed with 'Permission Raj' even for exercising the fundamental rights of speech & free press. India is typically a land of paradoxes. The country is keen to invite foreign direct investment but is unable to provide a systematic, transparent regulatory environment. The arrest of the Amway CEO is being looked at as a result of lack of clarity of Indian laws. There are so many instances...

The huge potential of the Indian economy can only be harnessed if we do away with these complications . A  simpler , non-redundant , well laid out, productive & efficient State approach is the need of the hour. As India goes for elections in the coming year, we have to demand this agenda from the candidates so that our economic policies are not restricted to limiting gold imports for reducing current account deficits.

There has to be a focus on systems that are robust, holistic & clean so that paradoxes are restricted to cultural spheres.