Graphics: Yogesh Kumar / Mint

Incidentally, the Indian rupee has not really seen much appreciation, despite attracting large dollar inflows, probably because unlike most Asian economies, India runs a current account deficit. Also, while several Asian central banks have been buying dollars in order to support it, the latest Reserve Bank of India bulletin shows that the central bank’s dollar purchases in August and September have been very modest.

For the Asian exporters, the worries are twofold. One, they are obliged to support their currencies and are adding to their reserves by buying dollars, which is depreciating in value. They have been trying to diversify their reserves away from the dollar, which makes the dollar even weaker. And two, they are losing exports to China. Incidentally, the relative weakness of the rupee should be good for the country’s export sector.

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