Indian Rupee Declines To Near 2-month Low Against U.S. Dollar After RBI Decision

The Indian rupee lost ground against the U.S. dollar in late morning deals on Wednesday, after the Reserve Bank of India decided to keep its key interest rates unchanged, as expected.

The Monetary Policy Committee of the RBI, led by Governor Shaktikanta Das, decided to hold the key repo rate at 4.00 percent. The reverse repo rate was left unchanged at 3.35 percent.

The MPC has judged that the ongoing domestic recovery needs sustained policy support to make it more broad-based.

By a majority of 5 to 1, the MPC voted to retain the accommodative policy stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

The rupee dropped to near a 2-month low of 75.52 against the greenback, from yesterday's close of 75.42. The next possible downside target for the rupee is seen around the 77 level.