Business RBI keeps repo rate, reverse repo rate unchanged

Rupee plunges to fresh record low of 73.77 against dollar

The rupee slumped as much 0.9 percent to a new all-time low of 74.23 against the US dollar, weakening from around the 73.65 ahead of the RBI policy statement.

Global oil prices have been on a boil, hurting the rupee, as India imports almost 80 per cent of its crude requirements.

The Indian central bank's intervention on Wednesday to calm down money markets proved short-lived in containing the fall of the rupee and its fallout on the stock and bond markets. The policy rate stands at 6.5 per cent.

A total of four members out of six in the committee voted in favour of the status quo.

SBI in its research report had said RBI should hike the repo rate by at least 25 basis points to control the value of rupee from falling.

Elaborating on the change to "calibrated tightening", the Governor said that it implied that "in this cycle, a rate cut is not the table and we are not bound to increase rates every time we meet". The policy panel reiterated its commitment to achieving the medium-term target for headline inflation of 4 per cent on a durable basis, Patel said. "It is, therefore, imperative to further strengthen domestic macroeconomic fundamentals".

Patel listed several risks and uncertainties which are clouding the economic horizon. Firstly, the measures aimed at ensuring remunerative prices to farmers for their produce may shake the agricultural revenue to an unpredictable extent.

Brent crude oil price was hovering near $85 per barrel in trade on Wednesday.

Pompeo heads to North Korea for nuclear talks
But he added that much work remains to be done and that the sanctions against the DPRK will stay in place "until denuclearization occurs".

Retail inflation in August increased 3.69 per cent, slowing from 4.17 per cent in the previous month.

Food inflation has remained unusually benign, which imparts a downward bias to its trajectory in the second half of the year, the central bank said in its fourth bi-monthly monetary policy unveiled here.

The RBI's statement said, "The infrastructure and construction sector continued to show solid growth".

Short positions on the Philippine peso PHP= also piled up as the country's central bank struggles to tame stubbornly high inflation that undermines its GDP growth target.

Confidence has ebbed in India's markets in recent weeks.

BAML says there's a considerable chance the RBI will raise rates again tomorrow.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

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