Did India’s risks on the external front really require RBI to dust off its rupee crisis playbook?
Thus, even on very conservative assumptions, India’s reserve position is quite robust. Hence, it is hard to tell what drove RBIs recent interventions. More than the level, RBI is possibly concerned about the direction of change in forex reserves, which had declined further to under $672 billion by 12 June. It is also possible that the central bank is concerned about the changing composition of capital flows.
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