Rupee @75-plus: Turbulence ahead

In this period of global turbulence, and with elections on the horizon, India must adopt credible and strong measures, along with clear communication, to stabilise the economy

With the US Federal Reserve raising rates, and the oil prices rising above $80 barrel after the recent OPEC meeting, there will be further pressure on the Rupee. That the rupee overshot by reaching Rs 72-73 to the USD, as some have argued, is wishful thinking.  

The rupee had been stuck at around Rs 64-65 to the USD for almost three-plus years after recovering from a drop to Rs 70 during the taper tantrum in August 2013. But with Indian inflation well above that of its major trading partners RBI’s real effective exchange rate (REER 2005=100) index shows that the