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

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On the Road to Dollar Colonisation

The parking of India's foreign currency reserves in dollar-denominated securities has compromised the country's monetary independence, leaving it especially vulnerable to a change in the United States Federal Reserve policy.

In 1971, the United States Treasury secretary John Connolly stunned European finance ministers after he famously commented, “the dollar is our currency, but your problem.”

For countries like India that have been accumulating US dollar reserves, that history is once again beginning to unfold. Unfortunately, the gravity of accumulating such dollar reserves does not appear to have sunk in with the political or bureaucratic leadership. 

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