Throwing money at the problem might not work for India anymore. In its battle against a strengthening dollar, the Indian central bank might have to accept there is little it can do to control the slide of the Indian rupee, which is now trading near a record low of around 82 to the dollar.As a result of aggressive intervention by the Reserve Bank of India in recent months, India’s foreign-exchange reserves had dipped to $551 billion by early September, down from $633.6 billion at the end of 2021.Reserves are now equal to 8.4 months of imports, notes Goldman Sachs. That figure was 13 months at the end of 2021, according to the RBI. Abheek Barua, chief economist at HDFC Bank, thinks the RBI will have to find more ways to bolster reserves if they slip below $500 billion.With forex interventions eating up reserves fast and no clear end to the dollar rally in sight, the RBI at the very least needs to be more judicious in deploying its resources—and probably ultimately allow the Indian rupee to find its own value. One thing it can do is aggressively use macroprudential and capital-account reforms to boost inflows, but even that is likely to lean against the currency’s slide, rather than fully break it.Since India depends heavily on imported energy, the rupee has been hard hit this year: down 10% against the dollar versus 9% for the MSCI Emerging Markets Currency Index, according to FactSet. India imports more than 80% of the oil it consumes, and inflation has been above the upper limit of the central bank’s target range—6%—for eight consecutive months.Now, just when oil prices were beginning to fall in dollar terms, more currency weakness looks likely to take away that breathing room. The RBI has already raised benchmark interest rates by 1.4 percentage points this year and will probably add another half point raise this Friday.One thing the RBI can do, besides raising its own policy rates, is make it easier for foreign currency to come in—and make it more attractive to invest in India in general. In July, the RBI relaxed debt-market rules for foreign portfolio investors and allowed commercial banks to raise interest rates on nonresidents’ foreign-currency deposits. On the other hand, Delhi’s increasingly aggressive regulatory stance toward American tech firms and the recent performance of many Indian IPOs might give some investors pause.India’s central bank isn’t in an enviable position right now. Attracting more dollars would help, but if the Fed stays on its current path and pushes the U.S. into recession, it might be tough for India to avoid much higher rates and a steep slowdown in growth, too.