LCU:Indian Rupee Advances Against US Dollar After RBI's Unexpected Rate Hike
NEW DELHI (Alliance News) - The Indian rupee resumed its early strength against the US dollar on Tuesday after the Reserve Bank of India's decision to raise key interest rates unexpectedly to address high inflation rate.
The RBI today raised its repo rate by 25 basis points to 8.00% from 7.75%. The repo rate is the rate at which the RBI lends to banks.
The RBI adjusted the reverse repo, the rate at which the bank accepts deposits from banks, to 7% from 6.75%. The bank was widely expected to leave key rates unchanged.
The rupee climbed to 62.895 against the greenback, up by 1% from near 2-1/2-month low of 63.51 reached on Monday. Further rally may push the rupee to a resistance around the 61.5 mark. The pair ended Monday's deals at 63.375.
