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Rupee Slips to 96.62 Against Dollar Following RBI Rate Hike
M
Moneycontrol•07-10-2026, 11:52
Rupee Slips to 96.62 Against Dollar Following RBI Rate Hike
- •The Indian rupee weakened to 96.60 per dollar as strong greenback demand and global uncertainty weighed on the domestic currency.
- •The depreciation followed the Reserve Bank of India raising the repo rate by 25 basis points to 5.50 percent and shifting its stance to calibrated tightening.
- •Analysts note that the shift to a hawkish stance has taken potential rate cuts off the table, contributing to the pressure on the rupee.
- •The rupee has declined over 4 percent in the past six months amid rising geopolitical tensions in West Asia that boosted safe-haven demand for the US dollar.
Key Questions Answered
The Indian rupee weakened to 96.62 per dollar due to strong demand for the greenback, heightened global uncertainty, and investors assessing the Reserve Bank of India's decision to raise the repo rate and shift its stance to calibrated tightening.
The Reserve Bank of India raised the repo rate by 25 basis points, moving it from 5.25 percent to 5.50 percent.
The recent rate hike was the RBI's first since February 2023, aimed at addressing inflation risks. The central bank previously adopted a calibrated tightening stance in October 2018, which was followed by a rate cut in February 2019.
