India, April 3 -- It is a tussle between the central bank, regulator, and speculators. It now seems that it will be a fight till the end. Either of the two will need to give up, at least temporarily, until the loser remounts more attacks in the future. On Monday (March 30), despite the curbs by the Reserve Bank of India (RBI) on short positions, the rupee lost ground. As we had predicted, the speculators came out growling as the rupee lost ground.

Yesterday, they were back in their caves with a whimper, as the rupee roared back to strengthen to just above INR 93 to a dollar compared to more than INR 95. At the end of the day, the central bank was in control, even as the banks, the ones caught in the middle like a deer in the rifle-sight,...