Rupee at 60: the options before RBI
With the rupee remaining vulnerable owing to a high current account deficit, RBI can’t let its guard down on the currency front
The rupee logged its biggest gain in last nine months on Friday, surging some 80 paise to close at 59.39 a dollar, after sinking to its historic low of 60.76 just two days ago. A bouquet of actions—ranging from the government raising natural gas prices from fiscal year 2015 to the Reserve Bank of India (RBI) tweaking the external commercial borrowing norms and small doses of dollar sale—arrested the free fall and recouped part of the recent losses, but it’s no time to celebrate as yet. The local currency will remain vulnerable as long as India’s current account deficit is high.
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