RBI policy: Rupee hits 20-month high at Rs 64.5 against dollar

RBI kept repo rate unchanged at 6.25% as widely expected, raises reverse repo to 6%

Indian bond yields on Thursday saw their biggest spike in two months, while the rupee hit a 20-month high against the dollar, after the central bank kept its policy rate on hold and said it was preparing to drain liquidity from the banking system.

The Reserve Bank of India left the repo rate at 6.25 per cent as widely expected, in line with other Asian central banks that have held rates this month.

But the RBI raised the reverse repo rate - or what banks get for deposits at the RBI - by 25 basis points to 6.00 per cent.