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Sign in to searchWhy has the Indian rupee come under pressure, what measures has the Reserve Bank of India taken to contain excessive forex volatility, what are their likely implications, and what should be the way forward?
1. Why the rupee is under pressure: • The rupee is affected by movements in the U.S. dollar, global interest rates, crude-oil prices, capital flows and geopolitical uncertainty. • India remains a major importer of crude oil, so higher oil prices raise demand for dollars and can widen the trade deficit. • Global risk aversion can also lead foreign investors to shift funds toward safer dollar assets, putting pressure on emerging-market currencies.
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Why the rupee is under pressure and how RBI is curbing forex volatility via derivative curbs, FERR and an oil-company dollar window, plus the way forward.
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