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Increasing the interest rate and burning billions in foreign reserves have done little to reverse the rupee’s standing as Asia’s worst-performing currency this year. If things deteriorate, India could turn to other weapons in its arsenal, economists say.
With the current-account deficit set to widen, thanks to higher oil prices and outflows from stocks and bonds, the rupee could be in for some more weakness after it plunged to a record 69.0925 against the dollar last month. The currency gained 0.1 per cent to 68.7725 on Wednesday.
Here are some of the measures policymakers may consider should that happen:
Raising Rates
The Reserve Bank
