RBI raises interest rates for the first time since 2023
The Reserve Bank of India raised rates in October and has been selling dollars from its reserves to slow the rupee's fall.
In October, the Reserve Bank of India raised interest rates for the first time since 2023. Higher rates make holding rupees more attractive and help keep inflation in check.
The move comes as the rupee trades near its weakest level ever. It slid past 95 to the dollar in May and again in October, and came close to 97.
What it means: RBI Governor Sanjay Malhotra says that by a number of estimates the rupee may be undervalued. But reserves and rate rises can only buy time. The lasting fix is more dollars coming in, through exports like smartphones, IT services and money sent home by Indians abroad, and fewer going out on imported oil.