The Indian Rupee weakened against the Pound and fell to its weakest level in a week against the US Dollar following the Reserve Bank of India’s interest rate decision.
The RBI left interest rates unchanged on Tuesday as it takes further action to support a battered Rupee. It also said that it will roll back recent liquidity tightening measures when stability returns to the currency market.
The Bank decided to leave interest rates at 7.25% but took a dovish tone as it cut its growth forecast for Asia’s third-largest economy to 5.5% for the fiscal year, from the previous reading of 5.7% previously. It held the cash reserve ratio at 4%.
“Lowering rates, which is needed for the policy mix, will be delayed by the currency weakness,” said Patrick Bennett a strategist at Canadian Imperial Bank of Commerce. “The best thing for the rupee right now is stability, and I think the RBI will not want to confuse the markets more by changing rates today.”
The RBI said recent liquidity tightening steps “will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation.”
RBI Governor Duvvuri Subbarao has called on the Indian government to take urgent measures to try and bring down the record high current account deficit, hitting a record 4.8% of Gross Domestic Product in the last fiscal year.
Current Rupee (INR) Exchange Rates
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 91.9889 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 79.5801 >
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.9564 >
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 54.3691 <
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 47.9255 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.3090 >
(Correct as of 10:10 am GMT)
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