Losing currency: Rupee sinks as monetary policy triggers carry unwinding

In a sign that the Reserve Bank of India’s (RBI’s) loose monetary policy could be leading to unintended consequences, the rupee nosedived 1.52 per cent after the central bank committed to buying Rs 1 trillion bonds from the secondary markets in the first quarter.
 
The rupee closed at 74.56 to a dollar — the lowest since November 13, 2020. The intraday fall is the steepest since the August 2019 levels.
 
According to Paresh Nayar, head of forex and fixed income at First Rand Bank, there was sustained dollar demand since Tuesday, which increased on Wednesday.
 
That may