The Indian Rupee fell against the Pound and US Dollar after data showed that inflation in India jumped to a seven-month high, increasing bets that the Reserve Bank of India will have to hike interest rates.
According to India’s Commerce department, the wholesale price-index climbed to 6.46% from the previous year and was more than the 6.1% rise seen in August. Most economists had been expecting a rise to 6%.
“This will not give much comfort for Reserve Bank of India (RBI)… and sets [the economy] up for a rate hike in the upcoming policy review at the end of the month,” said Badrish Kulhalli, a fixed-income fund manager at HDFC Standard Life Insurance.
Concerns are growing that the cost of living in India is growing as the nation’s economy experiences a slowdown. The weakness of the Rupee has played a major role in India’s problems as due to its weakness the cost of imports is more expensive.
In response to the inflation rise the Indian Central Bank is expected to increase rates when it gathers for its policy review on the 29th of October. Central Bank governor Raghuram Rajan is also expected to further ease liquidity curbs in an effort to support the Rupee. Since the currency hit multiple record lows in August the currency has managed to stabilize and climbed by 13%.
The Rupee also remains vulnerable to global events such as the ongoing political deadlock in the USA. The US government shutdown has now dragged on into a third week, with little sign that a deal will be brokered between President Barrack Obama and Republican senators.
Current Rupee (INR) Exchange Rates:
The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 97.8776
The Euro/Indian Rupee Exchange Rate is currently in the region of: 83.0196
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.2606
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 57.9709
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.2156
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.1522
(Correct as of 12:10 pm GMT)
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