Going on eighty: Rupee continues to test new lows against US dollar

It's too early to say if the central bank's recent measures will offer relief any time soon

The Financial Stability Report (FSR, June 2022), released last month, had observed: “Across emerging and developing economies, debt distress is rising as external funding conditions turn austere, compounded by currency depreciation and drainage of reserves as investors shun them as an asset class and fly to the safe haven of the relentlessly strengthening the dollar”.

This sentence in the Reserve Bank of India’s (RBI’s) bi-annual publication hasn’t got the attention it deserved. And the surprise over the decisions on the forex front on July 6-7 is proof enough.

But will these measures deliver the desired results? (The rupee closed at 79.88 to