The sharp and somewhat unanticipated appreciation in the rupee over the last few weeks has revived fears that a bloated exchange rate could be yet another thing that could rein in exports and growth. Those who go by the traditional six-country real effective exchange rate (REER), a weighted basket of exchange rates vis-à-vis major trading partners (the developed world heavyweights and China) could be getting their share of night sweats. Going by this index that has 2004-05 as its base year, the rupee was overvalued by a hefty 27 per cent in February (the latest available data point). The Reserve
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