New Delhi, June 30 -- The Indian rupee has regained some of the ground it lost against the US dollar in recent months. It traded at 94.63 to a dollar at the close of day on Monday. This is a recovery from the 96.83 level that it touched on 20 May. The interim peace deal between the US and Iran, subsequent decline in international energy prices and policy measures to attract more dollars to the Indian economy have all helped the rupee's external value recover.

Much the same happened in 2013. It was almost the same story as what we have seen this year. India's balance of payments deteriorated, though under different circumstances.

India then had a wide current account deficit, while the trade gap is far more modest today. The problem was ...