Bereft of a rupee option

Since July 27, the rupee has plunged by 14.4 per cent, from Rs 43.95 to Rs 51.35, against the dollar. That, in less than four months, is almost as steep as during the last global economic crisis. Then, it fell as much as 19.5 per cent, from Rs 41.89 on August 7, 2008 – about a month before Lehman Brothers collapsed – to a record low of Rs 52.06 on March 5, 2009. Given how spectacularly it recovered after that, one might be tempted to ask whether the rupee would rebound similarly once this crisis, too, passes.

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