India’s struggling economy is crying out for interest rate cuts to spur growth but with the rupee on the ropes monetary easing is out of the question at next week’s central bank meeting, analysts say. From being an investor hot-spot, Asia’s third-largest economy has been hit by capital flight even as it has been taking bold fresh steps to open its state-dominated economy to outsiders. “The last thing the Reserve Bank would want to see is rupee depreciation get out of hand,” said Credit Suisse economist Robert Prior-Wandesforde, ruling out a reduction in benchmark rates at Tuesday’s central bank policy meeting. Weak growth, a ballooning current account deficit, and stalled reforms amid a slew of graft scandals that have paralysed the political process have combined to take the shine off India. The most visible casualty of the country’s unloved status has been its currency, which this month slid to a lifetime low of 61.21 to the dollar, pushing the bank into crisis management mode.
