The Reserve Bank of India is broadening its defenses to steady the rupee, taking some of its strongest measures since the 2013 taper tantrum. That may give the currency a boost as trading resumes Monday, but the question remains: how far is the central bank willing to go as external pressures mount?
The RBI took the steps early Saturday as the rupee again neared a record low. They include opening a dollar window for state-owned oil refiners and introducing a reserve requirement for foreign-exchange derivatives, similar to one used by China’s central bank. The moves come just after the RBI raised interest rates on Wednesday and signaled it was open to further monetary tightening.
