Currency tremors
On the decline of emerging market currencies against the US dollar
The past few days have seen three emerging market currencies tumble against the dollar—the
Argentine peso, th
The action in the currency markets should bring back harsh memories of what happened in the middle of 2013. Several emerging market currencies were under pressure. The rupee was one of them. It is too early to say that the Indian currency is in safer territory right now—but it is surely a positive sign that the rupee has been stable this week.
The authorities deserve credit for learning the lessons of last year. The government took steps that helped shrink the current account deficit. The Reserve Bank of India rebuilt its reserves by offering banks an attractive swap deal for dollar deposits. The rupee may not yet be impregnable, but the defences look stronger this time around.
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