1 min read.Updated: 22 Jun 2022, 10:35 PM ISTLivemint
Given today’s exceptional circumstances and our own inflation worries, however, temporary support for the rupee might be justifiable. But then it must not set a rigid floor.
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The rupee slipped to a record low of 78.4 against the dollar on Wednesday. Persistent capital outflows have pushed it down. These are unlikely to abate, given the US Federal Reserve’s steep rate-hike curve that’s making dollar assets more attractive than those denominated in emerging-market currencies. Worsening matters, economic uncertainty caused by the Ukraine war has led to safety-seeking behaviour.