Rupee has fallen more than 14 percent since January, making it the worst performing Asian emerging market currency.
RBI Governor Urjit Patel’s comment at a press conference that the rupee’s fall is ‘moderate’ and relatively lower amongst the emerging market currencies. He also insisted the central bank was not targeting any particular level for the rupee.
Soon after the announcement, the rupee breached the 74 mark against the US dollar for the first time ever.
Patel said there was a subtle shift in the policy and there would be calibrated tightening, which essentially means a rate cut is off the table for now. Defending the status quo, he said, “Please recall that we had two rate hikes in the space of two months…we are not bound to increase rates at every meeting because that is not required.”