RBI to Ensure Undervalued Rupee Finds Correct Level
· Business · Economic Times, LiveMint, Business Standard
The Reserve Bank of India stated its intent to stabilize the undervalued rupee after the currency slipped to a five-month low of 96.8450 against the US dollar. Governor Sanjay Malhotra attributed the currency's decline to persistent foreign capital outflows and a stronger dollar index. The central bank raised the policy rate by 25 basis points while bumping up FY27 inflation and growth projections. Malhotra noted that markets can be irrational in the short run, and the central bank intervened in the forex market to curb volatility. The rupee ended the session down 0.4% at 96.7750 against the dollar.
Why it matters
A weakening rupee increases the cost of imported goods, crude oil, and foreign debt servicing for Indian consumers and businesses. The central bank's intervention and rate hike signal active measures to curb currency volatility and manage domestic inflation.
Read the original report — Economic Times
Join us on Telegram
Breaking news the moment it lands. At 10,000 members we ship the Android app.