Let’s get a couple of things straight. The fall in the rupee against the dollar over the past few weeks has gone from being a correction that shaved off some of the overvaluation that had built up to a fullfledged run on the currency.
Indian exporters may have reason to exult. But on the whole, this disorderly depreciation is bad news for the economy. This is particularly so since the rupee’s fall comes with a rise in a critical and largely imported input: oil. This could both rein in growth and add to inflation, a dangerous mix that every policymaker dreads. Read More
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