Rupee breaches 74-mark against dollar as RBI keeps policy rate unchanged

Indian Rupee breaches 73 mark, plunges to fresh all-time low

"Breaking: Rupee slips to 73.77".

Gandhi Wednesday hit out at Prime Minister Narendra Modi questioning his silence over the falling value of the Indian Rupee.

India's inflation rate was 3.69 per cent in August and is expected to go above the RBI's projected 5 per cent by June 2019 on higher fuel prices, the weak rupee and strong consumer spending.

Consistent dollar demand from importers following higher crude oil prices, kept the rupee under pressure.

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"Till when will the 56-inch chest be on "silent mode".

"Despite a stronger dollar, crude oil prices continued to remain very elevated, which is putting further pressure on current-account deficit currencies that rely on oil imports, India and Indonesia specifically", said ANZ's Goh.

The Reserve Bank of India has made a decision to keep the repo rate unchanged at 6.5 per cent.

He said: "You can not wish away the depreciation in the rupee if you are a current account deficit country".

DBS economist Radhika Rao expects a rate hike, along with the RBI shifting its stance to "hawkish" from "neutral". Also, it is up to the commercial banks either they want to keep interest rates 'stagnant or want to raise them.

The 10-year benchmark bond yield fell to 8.08 percent from 8.13 percent before the policy was announced, as traders expected a rate hike were caught wrong-footed. The risk to food inflation from spatially and temporally uneven rainfall is also mitigated, as confirmed by the first advance estimates that have placed production of major kharif crops for 2018-19 higher than last year's record. The comments raised the possibility of another Bank Indonesian rate hike before mid-December although it has already raised interest rates five times since mid-May.

Crude oil prices hit a four-year high in recent weeks as US oil sanctions on Iran loom next month.

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