The Reserve Bank of India is using macroprudential tools—including restricting derivative trading, raising foreign exchange risk provisions, and opening a dollar window for oil companies—to counter rupee depreciation. Nomura notes that if global conditions don’t improve, exchange rate flexibility and coordinated fiscal-monetary action may follow. The US-Asia interest rate differential, driven by Fed policy shifts and tightening by multiple Asian central banks, remains an underpriced variable for emerging market asset pricing over the next one to two quarters.