RBI Prioritizes Inflation Control Over Rate Hikes to Support Rupee, Sources Say

Deep News05-22 12:30

According to three sources, the Reserve Bank of India does not view interest rate increases as the preferred method to defend the pressured rupee, a stance that contradicts market expectations and indicates that borrowing cost policies will be centered on inflation rather than the exchange rate. Sources familiar with the RBI's thinking noted that the central bank still holds unused regulatory tools at its disposal. Media reports have previously revealed that related measures could include launching a dollar deposit scheme for non-resident Indians and adjusting taxes for bond investors. One source added that all alternative options are under consideration, and the central bank is coordinating with the government in its assessment. The source stated that there is currently no urgent need for the RBI to raise rates.

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