RBI’s recent currency curbs to support rupee can backfire. Here’s why

India’s boldest effort in a decade to support the rupee runs the risk of pushing away the global investors it’s spent years wooing. As the currency hit new lows amid the Iran war, the Reserve Bank of India forced local banks to unwind bearish bets across onshore and offshore markets. The lack of an immediate explanation rattled the lenders and investors, leaving them unsure of the RBI’s intent and questioning its handling of risks, according to bankers, who asked not to be identified discussing client matters. The cost Since the curbs, the rupee has gained more than 2 per cent…