Sinking rupee, failing economy

..........Also, the RBI would find it hard to reduce the policy rate when it announces its mid- quarter review next week. Currency depreciation has made it hard for it to cut rates because it would make capital inflows further unattractive and would further add to inflationary pressures. The government is trapped in a cul- de- sac. It cannot clamp down on imports for fear of further slowing down the economy and violating multilateral trade agreements. It cannot absorb the higher costs of..........

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