IMF Calls for Indian Emergency Rupee Plan in Taper Warning

India should prepare a plan to respond to volatility in global currency markets that may come as the U.S. Federal Reserve reduces monetary stimulus, the International Monetary Fund staff said in a report.

While India’s finances have improved since last year, a coordinated plan is needed in case capital account pressures re-emerge, the IMF said. Any plan should make rupee flexibility the key defense and include measures to raise the benchmark interest rate, impose cash curbs, open foreign-exchange swap windows and raise diesel prices, it said in an annual review of India’s economy.