Storm clouds are gathering over the Indian economy
....The rupee has been falling against the dollar and other foreign currencies week after week, and is crossing the historic low of Rs 54 to the dollar. The RBI has probably intervened in the foreign exchange market by selling dollars in order to stem the fall of the rupee. (I write “probably” because the RBI does not, for understandable reasons, conduct these interventions publicly.) But there is a limit to the extent to which the RBI can succeed in its efforts. Inevitably, market forces will determine the value of the rupee.........
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