For India’s policymakers, stabilising an extremely vulnerable rupee means targeting the country's deepest economic romance. Following a rare appeal from Prime Minister Narendra Modi urging citizens to voluntarily halt their gold purchases for a year, the government codified the request by hiking import duties from 6 per cent to 15 per cent.
The two-step intervention reflects a calculated gamble to shield foreign exchange reserves and insulate the currency from external energy shocks, even if it means putting a steep premium on the nation's darling safe haven.
