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More measures from the Reserve Bank of India (RBI) and government are needed to overcome balance of payment challenges and rupee depreciation, says a report by HSBC.
To contain the sharp depreciation in the rupee, which has plunged 13 per cent since May, and contain the current account deficit (CAD), RBI resorted to currency stabilisation measures and the government has taken steps such as making gold imports costlier. More, a new set of measures focusing on curbing oil, gold and non-essential imports and opening up external fund raising have been taken. The rupee slipped to 61.80 to a dollar earlier in the month.
"Will this be enough to fix the leaks? We do not think so," HSBC Chief Economist for India and ASEAN Leif Lybecker Eskesen said in a research note.
