Another currency crisis waiting to happen, says financial analyst

Absence of timely intervention by the Reserve Bank of India — coupled with imprudent conduct of commercial banks — may have caused the ongoing volatility in the forex market. This is a question that Indore-based financial analyst and long-time RBI watcher Mahesh Natani has raised as he points to an additional looming currency crisis on account of roughly $92.5 billion of trade credit (consisting of buyer’s credit and foreign letters of credit) outstanding for all commercial banks, with $73.5 billion due for repayment over the next few months.

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