India’s Rupee Rebounds on Inflation Pressure

The Indian rupee climbed today after the previous decline as the currency’s weakness spurred the speculation the central bank will intervene to support the currency and trim the inflation.
Inflation in India stayed above 9 percent since the beginning of December even after the central bank has increased the interest rates. The weaker currency contributed to the growth of the consumer prices. The Reserve Bank of India may be forced to increase the borrowing costs again to tame the inflation growth. India differs in this regard from other emerging markets that have to lower rates to mitigate the negative influence from the European crisis.
USD/INR fell from 49.8250 to 49.4200 today as of GMT 17:35 GMT.

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