In 1947, India had surplus sterling balance which ,unfortunately, we soon frittered away. Although hints were dropped to Shri B.K.Nehru, then Under Secretary in Ministry of Finance by the Treasury of England that "If we (INDIA) shift our forex balance to US$account as we (England) may devalue its £ or words something to this effect I do not remember" (Ref Nice People finish second by B.K.Nehru). The net result was our Re weakened vis-a-vis $, currency of predominant power whereas £ was continually on decline due to ravages of war. B.K.Nehru says he was given training in ECD, RBI, Mumbai in 1940 (He was 1935 batch ICS) and he took up the matter with Finance Secretary who failed to understand anything. However, the net result was we lost considerable amount of forex reserves.
- Sitendra Kumar
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