Suggestion to prevent Rupee Depreciation — FM/Guv should head to Tirupati..

Of all the boring and much-repeated suggestions, Here is a really interesting one from Jamal Mecklai.

He says the FM and RBi Guv should head to the much revered Tirupati Balaji Temple. Well it is not for offering prayers alone, but for helping INR:

The recent actions have doubly confirmed to investors (a more polite word for speculators) that their bets were correct and the rupee can go nowhere but down. Thus, when – and it has to be when, not if – the RBI lifts some of its terrifying constraints on the market, the rupee will whoosh lower at a pace that will startle all of us.

Unless, of course, the government and the RBI recognise that there is a way out – the only way out that I can see. Even better, it is remarkably simple, easy to implement and, best of all, will have an immediate impact on the rupee’s debauched weakness.

The finance minister and the RBI governor should jointly – and immediately – approach the trustees of Tirupati Trust Foundation. Three of these are state government appointees, and, given the current political dispensation, this is a distinct advantage. They should, of course, offer prayers and an opportunity for the already hugely rich trust to make significant additional amounts of money.

The deal is to get gold from the trust:

While there are no definitive statistics available, I believe the Tirupati Trust Foundation has well over 1,000 tonnes of gold. The number I was actually told was 1,700 tonnes, which is about five per cent of all the gold held in India (between 30,000 and 35,000 tonnes). To get really excited, multiply that total amount of gold by $48.5 million (the value of a tonne of gold at $1,350 an ounce) which comes to between $1.5 trillion and 1.7 trillion – that’s right, trillion.

These, by the way, are assets – it is money we Indians own. And, given that they are foreign currency assets, it is hard to understand why we have a foreign exchange problem.

The finance minister and the governor should offer the Tirupati trustees annual earnings of, say, Rs 3,000 crore (two per cent interest on 500 tonnes of gold) plus savings of the cost of storage of the gold, which, itself could be a significant amount. And, of course, that the gold would be safe with, say, State Bank of India (SBI) and that it can be retrieved at one day’s notice. It’s hard to see how any trustee could turn this down.

On the market side, SBI could hold part of the gold hoard – even as much as 40 per cent – to support any sudden withdrawal, although the beauty of starting with religious trusts is that they don’t need to ever withdraw the gold. The balance – 60 per cent, or 300 tonnes – can be sold in the domestic market, with the price risk on the sold gold hedged off-shore (at a cost of around one per cent a year). SBI would get about Rs 85,000 crore (300 tonnes at $48.5 million a tonne) at a modest cost of two to three per cent, which it could deploy in lending or, till demand picks up, in government securities. And, critically, gold import demand would collapse, taking the current account deficit down with it.

The plan should be announced as soon as it is finalised – and I see no reason why that should take more than a few days. The RBI and the government should then expand the plan to other religious trusts and, ultimately, to individual gold holders. In parallel, they can unwind some of the egregious constraints they have put on the market.


4 Responses to “Suggestion to prevent Rupee Depreciation — FM/Guv should head to Tirupati..”

  1. Loknath Rao Says:

    Good idea. There are other temple trusts equally rich. Vaishno Devi Shrine trust, Guruvayoor Temple Trust, Ananta Padmanabhaswamy trust, Shirdi Sai Baba Trust, Puri Jagganath trust, Somnath trust, Meenakshi temple trust.

    Collectively these temples can have estimated gold and cash valued at over 3 trillion dollars.


    I wont trust that Lungi bastard Chidambaram and Mafia Madam Sonia with this money. Once they are gone from scene in 2014, I would be glad to see these temples come forward and rescue both Indian economy and Hindu pride.

    Whoever this Jamal Mecklai is can keep his ideas in the closet… INDIA is poor but Indians are not. The State stole from Indians all these years but we wont allow them to steal from Gods now. In any case these intellects in Congress party are self confessed atheists and more so when it comes to Hindu Gods

    How about money coming from Haaji Ali and Ajmer Dargarh or may be Mecca trust.

  2. theworldlovesme Says:

    Excellent Idea.

  3. kailash Says:

    Dear Mr. Jamal,

    Suggest this to Europe, even Vatican will have huge money.

    But in India for sure, this mentally Bankrupt Congress cannot be given Gods’s help also. God will go bankrupt, which is not acceptable.


  4. Loknath Rao Says:

    Well Said Kailash. Superb.

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