Why the World Bank is ‘actually optimistic’ about India despite the rupee hitting 95 per dollar
The Reserve Bank of India’s (RBI) management of the rupee’s exchange rate has received a thumbs-up from the World Bank, with its officials noting that the economy’s strong buffers at the start of the war in West Asia explain why the Bank is “actually optimistic” about India’s ability to withstand the brunt of the ongoing crisis. “I think that the position of the central bank been very consistent: manage short-term volatility in the exchange rate, which is exactly what you would want to do in in situations where shocks could be nonlinear and then the snowball effects kick in; but overall, not try to influence the course of the currency when there are these massive structural forces in the market,” Aurélien Kruse, World Bank’s Lead Country Economist for India, said on Thursday. “So as far as I can tell, even though it’s not my role to comment on the RBI’s policy, it makes a lot of sense to me,” he added. A delay in the conclusion of the India-US trade deal sparked foreign investment outflows …
