India’s central bank may need to draw on its 2013 taper tantrum playbook and earlier balance-of-payments crises to mount an effective defense of the beleaguered rupee.
The Reserve Bank of India under Governor Sanjay Malhotra is considering a range of measures to stabilize the currency, including raising interest rates, additional currency swaps and steps to raise dollars from overseas investors, Bloomberg News reported Thursday.
The urgency has grown after the rupee slumped to a record low of nearly 97 per dollar this week, driving up import costs and further eroding investors’ confidence. The RBI’s immediate priority: arrest further depreciation.
