by Central Bank Conducts Heroic Interventions While Rupee Ignores Them Completely
Mumbai The Reserve Bank of India announced this week that it is conducting extensive interventions in currency markets to defend the rupee, which is code for “we’re spending foreign exchange reserves to delay the inevitable while pretending it’s a strategy.”
The rupee has been depreciating against the dollar with the consistency of a leaky faucet, while global FPI outflows of ?11,820 crore in early December have essentially told investors: “Maybe India isn’t the best place for your money right now.”
The RBI’s approachbuying dollars to support rupee strengthis economically sound but fundamentally limited. It’s equivalent to plugging a dam with your finger while standing downstream. Each intervention prevents dramatic collapse while burning reserves that India actually needs.
The underlying issue isn’t that the RBI isn’t trying hard enough. It’s that global investors are reassessing risk in emerging markets amid higher US rates and geopolitical uncertainty. No amount of currency market intervention fixes that.
Traders remain “on edge,” which financial analysts use as code for “everyone is panicking while pretending to be professional about it.”
Discover Bohiney Magazine’s economic breakdown of India’s currency crisis for the deeper analysis.
SOURCE: https://bohiney.com
SOURCE: Bohiney.com ()
