Pakistan and Bangladesh are running to the IMF, but what is keeping India away?

Bangladesh is seeking a bailout from the International Monetary Fund; Pakistan is expected to receive its own $1.2 billion rescue deal soon. Neither wants to end up another Sri Lanka. The island nation was pulled into a vortex of empty dollar coffers, popular anger over shortages of food, fuel and medicines, political chaos and a still-deepening economic funk.

Among South Asia’s major economies, only India remains standing. But the region’s largest economy is also wobbling a bit.

Even after depleting 11% of its foreign-currency arsenal, the Reserve Bank of India has only managed to keep the rupee near an all-time-low of about 80 to the dollar. Should New Delhi start filling up an IMF loan application? Not so fast.

For one thing, a strong dollar isn’t a big problem for balance sheets. Yes, Indian firms are adding to the pressure on the rupee by scrambling to buy protection for their $79 billion in unhedged overseas debt. But about half of it — or $40 billion — is the liability of state-run borrowers.

Their exchange-rate risk, as RBI Governor Shaktikanta Das has argued, can be absorbed by the government, although such a contingency is unlikely to arise. As for the reserves falling to $573 billion from $642 billion in October, “You buy an umbrella to use when it rains,” he said.

Governor Das omitted to mention that he also has a mackintosh handy against the heavy downpour caused by relentless tightening of US interest rates. That would be the 18 million-strong Indian diaspora, the world’s single-largest community of people living outside their country of birth.

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