The argument against holding the rupee at a level its fundamentals don’t support

The Economic Times reports that former RBI governor D Subbarao considers it costly and ultimately futile to push the rupee to a level at odds with economic fundamentals. The paper says the rupee recovered nearly 2% from near-record lows of 96–97 per dollar after RBI measures to curb dollar demand and speculative bets. Subbarao cited capital outflows as a structural cause of depreciation and called for tax reforms to attract foreign investment.