Wave of Foreign Money Threatens India’s Tight Grip on Rupee
- Policy makers are balancing currency pressures, liquidity glut
- Central bank is taking criticism over distorted rates pricing
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A relentless torrent of funds rushing into India’s markets may tip the central bank’s delicate balancing act in 2021.
For most of this year, the Reserve Bank of India has capped currency gains as global investors poured around $50 billion into stocks and stakes in companies. This has boosted rupee liquidity in a banking system that’s already flush with cash from the RBI’s stimulus measures.