New Delhi, Oct. 7 -- When the rupee went to 87 units against the dollar, the market call was that it would cross 88. Once this mark was reached, the call was 89, with some even speaking of the rupee hitting 90. Several explanations were offered. But can one really make an informed guess on where the rupee goes? The best response is a shoulder shrug, as the present situation is quite different from earlier moments when there was reason to turn bearish.

A key driver of the rupee is the market's perception of what the Reserve Bank of India (RBI) may do. Whenever the rupee drops without a convincing explanation, the market turns to RBI for direction.

RBI has maintained that it does not target any specific level, as the exchange rate is mark...