Rupee Under Pressure Despite RBI Hike
The Indian rupee hovered around 96.58 per dollar, near record lows, weighed by a firmer dollar, higher global bond yields, and continued foreign equity outflows. Brent crude also climbed above $101.50, adding to concerns over India’s import costs and weighing on emerging-market inflows. The decline was partly cushioned by the RBI’s 25-basis-point repo rate hike to 5.50%, the highest in a year and its first since February 2023. The move was in line with expectations and came as the central bank shifted its policy stance to “calibrated tightening” amid rising inflation risks. The RBI has also been using reverse repo operations, open-market bond sales and sell-buy FX swaps to drain excess liquidity, while state-run banks were seen as likely intervening to support the rupee.
58 per dollar, near record lows, weighed by a firmer dollar, higher global bond yields, and continued foreign equity outflows. 50, adding to concerns over India’s import costs and weighing on emerging-market inflows. 50%, the highest in a year and its first since February 2023. The move was in line with expectations and came as the central bank shifted its policy stance to “calibrated tightening” amid rising inflation risks.
The RBI has also been using reverse repo operations, open-market bond sales and sell-buy FX swaps to drain excess liquidity, while state-run banks were seen as likely intervening to support the rupee.