India’s central bank will need to intervene more actively in the country’s foreign exchange market to curb the rupee’s fall, according to Standard Chartered Bank, Reuters reports. The Reserve Bank of India (RBI) has not purchased or sold dollars in the foreign exchange market for eight successive months, including July.
The partially convertible Indian currency touched a two-year low of 48.24 to a dollar on October 4. The rupee has already weakened by over 7 percent so far in 2011. The currency is falling as imported inflation rises and exchange rate volatility risks increase.
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