Let it fall

RBI should not spend dollars defending the rupee

The rupee fell further against the dollar on Tuesday after opening at Rs 71.28, lower than Monday’s close of Rs 71.21. Some analysts’ expectations that it may slip further against the dollar in the foreseeable future might well be borne out soon. The US dollar is not showing major weakness, given expectations of trade tensions as well as the United States Federal Reserve’s decision to slowly tighten monetary conditions. For India, this continues to be a sign that macro-economic indicators need to be carefully scrutinised by the government and the Reserve Bank of India. While external account weakness is nowhere