Economists expect RBI to hike rates in Oct policy as rupee fall continues

With the continued fall in the rupee, economists and bond market participants expect the Reserve Bank of India (RBI) to hike rates in its October policy.

The rupee closed at 71.57 a dollar, down from its previous record close of 71.18. Other emerging markets currencies also fell against the dollar. The Indian central bank did not prevent the rupee’s fall.
 

The rupee has depreciated 10.5 per cent against the dollar this year, making it Asia’s worst-performing currency.

“If the rupee depreciation continues like this, a rate hike is the only orthodox textbook option left for the RBI,” said Soumyakanti Ghosh,