India's struggle to defend rupee shifts focus to rate hikes
Updated : September 19, 2018 10:54 AM IST
The government's latest measures to support the rupee announced last week were particularly underwhelming for market participants who have since increased bearish positioning on the currency.
At the same time, the failure to stem the rupee's slide using central bank intervention and other means over the past month has shifted investor focus to the need for interest rate hikes to do the job.
The rupee has been punished for the country's widening trade gap and swept into the broader emerging market turmoil caused by rising US interest rates and an escalating US-China trade conflict. It is Asia's worst performing currency this year.
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