Arvind Panagariya, chairman of the 16th Finance Commission, has urged the Reserve Bank of India to stop defending the rupee aggressively with foreign exchange reserves. He described the psychological barrier of 100 rupees per dollar as just a number.
Panagariya said letting the currency depreciate would be the right response to pressure from rising oil prices. He warned that continued intervention would cause reserves to bleed out without lasting success. The advice comes amid ongoing currency challenges for India.
