First, on the rupee, one of the most effective ways to stabilise the currency is to improve the flow of foreign exchange into the country. While India has made significant progress on the export side, there is still substantial work required in attracting larger and more consistent foreign portfolio investment and foreign direct investment.

The Reserve Bank of India weighs interest rate hikes, $15B in currency swaps, and dollar reserves to stabilize the rupee amid capital outflows and a strong dollar.

External geopolitical factors are pressuring the rupee, not domestic economic mismanagement. This requires careful policy handling to avoid destabilizing sentiment. Continued…