India, April 11 -- In several columns on this page, we presented a warning. While the central bank's aggressive moves, even archaic in the age reforms, to staunchly and unequivocably support the rupee may work in the short term, they may result in a freer fall later. Indeed, after the weekend when the crunching limits on short positions were imposed, the rupee slumped below INR 95, and only strengthened after a series of extra and stringent moves were imposed immediately. The rupee recovered, but still behaved like an ailing patient. The Reserve Bank of India (RBI) won the crucial battle but one is not sure about the state of war.

Experts cite several reasons why the rupee may be under more pressure in the future. The first is that an im...