MUMBAI: Rupee fell to 59.64 or 0.39% against the US dollar after the Reserve Bank of India announced the monetary policy keeping policy rates unchanged.
The Indian currency had risen to 59.55 against the US dollar ahead of the policy after opening at 59.68 levels. It had touched a low of 59.71 in the morning trade. Rupee had closed at 59.41 against the US dollar on Monday.
"The rupee depreciated in nominal terms by as much as 5.8 per cent between May 22 (the day of the first 'announcement effect') and July 26, consequent on sudden stop and reversal of capital flows in reaction to the prospective change in the US monetary policy stance," said RBI.
The Reserve Bank of India said that large current account deficit above the sustainable level of 2.5% of GDP for three years in a row, is a formidable structural risk factor.
Rupee has fallen to all time low of 61.21 against the dollar on July 8, forcing RBI to take slew of measures including capping liquidity in the system and raising penal interest rate on marginal standing facility.
A poll of 15 economists showed that both repo rate- the rate at which RBI lends to banks and cash reserve ratio- the proportion of deposits banks need to keep with RBI remained unchanged. Repo rate is at 7.25% and CRR is at 4%.
