India is weighing the Maldives’ request to extend a currency swap facility amid mounting financial strain and regional conflict spillovers. Although New Delhi has provided major support in the past, current rules may limit how much it can offer now. A refusal could worsen near-term liquidity as large debt repayments approach.
With the rupee hovering around 90, India is bracing for a potential current account deficit (CAD) stress test, recalling the 2013 episode when the currency fell nearly 29% in six months. Back then, India was tagged a “Fragile Five” economy. The key question now is whether stronger buffers and fundamentals can prevent a repeat during fresh depreciation pressure.
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