On a slide

There is much to worry about in India. The slowdown in growth might have coincided with global weakness, but the main problems are all domestic. The political backdrop is increasingly toxic. Promises of economic reform have come to little. Ongoing banking sector problems have undermined domestic confidence, consumption and investment. Monetary policy credibility is a further problem. With inflation up and growth continuing to slow, the central bank is in a tight spot. What should give? The currency. We would be short the rupee versus the US dollar.

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