India’s central bank is considering tools used during earlier currency-stress episodes to defend the rupee as it weakens sharply. Multiple outlets report that the urgency has increased after the rupee falls to a fresh record low of nearly 97 per US dollar this week. The depreciation is raising the cost of imports and adding pressure to financial sentiment, with investors expressing concerns as the currency moves further away from earlier levels.
One report says the RBI may rely on a “2013 taper tantrum playbook” and approaches previously applied during balance-of-payments crises, suggesting a mix of measures intended to stabilize external accounts and limit volatility. While specific actions are not detailed in the available summaries, the reference to the 2013 episode indicates the RBI could use liquidity and market interventions or other policy actions aimed at improving rupee stability and reducing stress in foreign-exchange markets. The situation remains closely watched as investors assess whether policy responses can slow the currency’s decline and contain spillovers from higher import costs.
