inflation ,rupee and economics

The environment of higher interest rates , as per economic theory is beneficial to home currency
as  foreigners get higher yield as compared to their governments.

But will this hold true for rupee in current scenario ?

May WPI is screeching higher 10.16 % (year ago 1.38%) . May month CPI is at a cool +13.91%...........  screeching higher . The fuel prices are (part) liberalised leading to perhaps
 an icing on cake situation for inflation. Where is the power of spending in common man ?-- Its gone.
the 2008 recession answered by appropriate pumping  liquidity into the system worked . It worked because the power of spending was still dominant in the pockets of consumer.

Now the talk of the globe is double dip recession. There have to be enough saved resources to
survive during the double dip. That is what is now difficult with hike in price of all flammable items.
The consumption power would thus be hampered incase of a double dip and that would translate into
everything from reduced topline growth of corporate sector and end with transmitted effect  on to markets both equity as well as currency .

So to say the Rupee would defy economic theory and may have an uphill task when it comes to appreciating.
against the dollar