Rupee’s Slide Pits Central Bank Against Market Full of Bears
- RBI stepped up measures this week to defend the currency
- Reserves may rapidly erode in outflow spiral: Cornell’s Prasad
This article is for subscribers only.
The rupee’s tumble to a succession of record lows is sparking fears of a deeper selloff and pitting the central bank against analysts and strategists who are predicting further losses.
The currency has already dropped more than 6% this year, putting it on the threshold of 80 per dollar for the first time, as fears of a global recession and spiraling oil prices fuel outflows and deficits. The authorities are well aware of the potential risks, with the Reserve Bank of India and the government announcing a raft of measures in the past week to support the currency.