The rupee has been undergoing intense pressure due to a prolonged geopolitical stalemate in the Middle East that has driven up global crude oil prices. After slumping to an all-time closing low of 96.96 against the US dollar on Thursday, the currency staged a brief recovery to end at 96.36 following central bank intervention and a slight retreat in oil prices, before stabilising further near the 96 mark on Friday.
Amid this volatility, global investors are increasingly gaming out scenarios where the currency breaches the unprecedented 100-per-dollar threshold. This has prompted Arvind Panagariya, the 16th Finance Commission Chairman, to urge the Reserve Bank of India (RBI) to abandon aggressive defense tactics using foreign exchange reserves and allow the currency to depreciate naturally.
