ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

LABOUR-Ship Watchmen Broken Commitments

pendence on the international trading system through a policy of maintaining an overvalued exchange rate for the rouble. The exchange rate between rupee and the rouble, really speaking, does not directly influence the volume of current trade under the rupee trade and payments agreement. Under the system both the countries quote he prices of their commodities in rupees and so long as the prices quoted are attractive or competitive, trade would continue to take place. All along prices normally quoted by the USSR supliers are such that they are comparable with those that are quoed by other suppliers to India or what the USSR suppliers would earn by directing their exports to he rest of the world. Similarly, Indian exports to the USSR are at the same prices as applicable to India's exports to the rest of the world. Under such an arrangement the exchange rate is of no direct relevance so long as the prices quoted for Indian and Russian goods continue to be in Indian rupees and payments are settled on a current basis. The exchange rate matter has relevance only for two types of transations, viz, goods supplied by the USSR on long- term credit basis and the settlement of invisible transactions. Since transactions relating to invisibles are relatively small, the main relevance of the exchange rate is in regard to goods obtained by India on credit. In fact the dispute between India and the USSR exclusively centered on the repayment obligations of India to the USSR in respect of the long-term credits.

Dear reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top