New RBI chief faces calls to unshackle rupee as dollar rises

India's new central bank head faces a tough decision on managing the rupee's exchange rate—focus on squeezing volatility like his predecessor did, or respond to calls for more flexibility as the dollar continues to surge.

- Bloomberg

Former Reserve Bank of India (RBI) governor Shaktikanta Das's term was marked by efforts to stem currency swings, as he sought to impart predictability to foreign investors as well as local importers and exporters.

While effective in dampening fluctuations, critics say Das's tight grip on the rupee effectively fixed the currency to a crawling peg against the dollar. That has hurt the nation's export competitiveness during a period of slowing growth, they say. Tuesday's data showed that India is headed for its weakest economic expansion since the pandemic in the current fiscal year.