The rupee is close to erasing all gains since the RBI started tightening cash on July 15. The rupee fell to as much as 59.98 from its level of around 59.55 before the RBI left interest rates and the cash reserve ratio unchanged.
The rupee closed at 59.89 on July 15 before the Reserve Bank of India announced its measures that evening.
Dealers said the absence of stronger measures such as a repo rate hike at the RBI's policy review leading to rupee weakness amid doubts about how long the RBI can sustain its steps. The RBI is also talking about rolling back cash tightening steps in calibrated manner if rupee stabilises.
Copyright Thomson Reuters 2013