INDIAN EXPRESS DATED 18th May 2026

Summary of Important News Items Editorials-342

INDIAN EXPRESS DATED 18th May 2026.

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1.      Rupee slide and the lesson from artificial stabilisation

The rupee crossed 96 to a dollar and policymakers began debating whether its earlier stability at 82–83 during 2023 and 2024 had only postponed depreciation. The event is important because the West Asia crisis has pressured India’s capital account, raised import costs and increased fears that the rupee may test the psychological level of 100. The logic of the debate is that excessive foreign-exchange intervention may smooth volatility in the short term but create sharper adjustment later when reserves and market confidence weaken. The RBI’s formal stand remains that it does not defend a fixed level but intervenes only to prevent disorderly movement. The broader gist is that exchange-rate management must balance stability, investor sentiment, inflation and reserves, but structural measures to attract capital and reduce external vulnerability are more durable than defending a currency level.

2.      India-Netherlands strategic partnership