RBI's innovative approach to control the fall in rupee is commendable

The efficacy of the central bank's steps will be seen in the coming days

The fall of the rupee has been driven by both fundamentals as well as external forces. A stronger dollar compared with the euro automatically leads to decline in value of all currencies. Simultaneously, the impact of higher interest rates in the US also means that investment flows turn around. A combination of these two factors has led to the rupee now crossing the $79 mark and moving towards 80. In such a situation what can the Reserve Bank of India (RBI) do?

The RBI has always maintained that it has various options to tackle a volatile rupee. Direct selling of