Rupee@74 After RBI Keeps Key Rate Unchanged In Surprise Move
Rupee breached the 74-mark against US dollar for the first time. The reverse repo rate also remained unchanged at 6.25%. The RBI retained GDP growth estimate at 7.4% for FY19.
The Reserve Bank of India (RBI) on Friday kept the repo rate (key lending rate) unchanged at 6.5 per cent. Meanwhile, rupee breached the 74-mark against US dollar for the first time, hitting a new low of 74.20 against the dollar soon after the RBI announced its monetary policy. Even as RBI Governor Urjit Patel said that the rupee fall is moderate in comparison to emerging markets peers, the rupee breached the 74-mark against the US dollar for the first time ever, reported news agencies Reuters and Press Trust of India (PTI).
Anticipation of a rate hike had increased in the past month as oil prices climbed, the rupee's slide accelerated and concerns on liquidity emerged. Experts had largely expected the central bank to hike the repo rate by 25 basis points or 0.25 per cent. However, five of the six panel members voted to leave the rate unchanged.
The reverse repo rate or the rate at which RBI borrows from commercial banks also remained unchanged at 6.25 per cent.
The RBI had last raised interest rates in two successive policy reviews in August and June this year.
The RBI retained GDP growth estimate at 7.4 per cent for fiscal year ending in March 2019.
