The Indian rupee fell against the US dollar today after India’s central bank decided to cut interest rates at today’s monetary policy meeting.
The Reserve Bank of India decided to cut its main interest rate by 25 basis points to 6% today. Other interest rates were reduced as well. It was the second cut this year after another 25 points cut in February. Such decision was widely expected by analysts. They were actually more surprised by the statement that the central bank “decided to maintain the neutral monetary policy stance”.
The RBI cited slowing economic growth, both domestic and global, as well as the low level of inflation as the main reasons for its decision. Taking into account those considerations, many experts anticipate another 25 points cut later this year despite the bank’s “neutral stance”.
USD/INR rallied 0.91% to 69.05 as of 10:17 GMT today.
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