India's failing defence of the rupee is doing more harm than good. It's time New Delhi left the plunging currency to market forces and shifted its focus to boosting exports and investment.
A country that decides to defend its exchange rate has only two options: impose capital controls, or surrender independence over monetary policy. The Indian authorities have tried a bit of both. They have put restrictions on resident individuals and companies looking to invest overseas and in gold. The central bank has also raised short-term interest rates, thereby giving up its ability to use monetary policy to lift GDP growth from its 10-year low.
Text and Images: Reuters