Rupee fundamentals

The Reserve Bank of India (RBI) Governor Raghuram Rajan has done well to pour cold water on renewed attempts by currency speculators to ‘short’ the rupee. Since falling to an all-time low of 68.36 to the dollar on August 28, the rupee had recovered to 61.41 by October-end before the fresh bout of weakening this month. On Wednesday, it threatened to breach the 64 mark, only to retreat after Rajan’s statement, effectively rubbishing the two main reasons that were bandied about for the rupee’s latest slide.

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