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Rupee Falls to 96.84 After RBI Raises Interest Rates
The Indian rupee lost value against the US dollar on Wednesday.
It briefly fell to 96.84 rupees per dollar and finished the day at 96.77.
India’s central bank, the Reserve Bank of India, raised its main interest rate by 0.25 percentage points.
It also signaled that it may keep tightening policy if inflation and other economic information call for it.
Higher oil prices, rising bond yields, money leaving Indian shares and a strong dollar have added pressure on the rupee.
The currency has fallen 7.5% so far in 2026.
RBI Governor Sanjay Malhotra said some estimates suggest the rupee may be undervalued.
The RBI also raised its forecasts for both inflation and economic growth in the fiscal year 2027.
The rupee touched an intraday low of 96.84 per US dollar on Wednesday and closed at 96.77.
The Reserve Bank of India raised its repo rate by 25 basis points to 5.50%, its first hike since February 2023.
The RBI changed its policy stance from “Neutral” to “calibrated tightening,” backed by four of six monetary policy committee members.
The rupee has fallen 7.5% in 2026, amid high oil prices, rising bond yields, foreign equity outflows and a firm US dollar.
The RBI raised its FY27 inflation forecast to 5.2% and its GDP growth projection to 7.1%.
- Who
- The Indian rupee and the Reserve Bank of India; RBI Governor Sanjay Malhotra commented on the currency.
- What
- The rupee weakened to an intraday low of 96.84 per US dollar after the RBI raised its repo rate by 25 basis points to 5.50%.
- Where
- India’s currency markets.
- When
- Wednesday; the rupee has fallen 7.5% so far in 2026.
- Why
- The article cites elevated crude oil prices, surging bond yields, foreign equity outflows and a firm US dollar as pressures on the rupee.
Key facts
- Intraday low
- 96.84 rupees per US dollar
- Closing exchange rate
- 96.77 rupees per US dollar
- Rupee decline in 2026
- 7.5%
- New repo rate
- 5.50%, up from 5.25%
- Rate increase
- 25 basis points
- FY27 CPI inflation forecast
- 5.2%, up from 5%
- FY27 GDP growth projection
- 7.1%, up from 6.7%
- RBI policy stance
- Changed from “Neutral” to “calibrated tightening”
Quotes
Sanjay Malhotra
Governor of the Reserve Bank of India
“The shift in stance from neutral to calibrated tightening has added to nervousness in the currency market, indicating that further rate hikes could remain on the table depending on inflation and incoming economic data. The rupee is likely to remain under pressure with elevated volatility, with the range seen between 96.45–97.25”
financialexpress.com
“We will ensure that the rupee stabilises, that the rupee finds its correct value, and we will support an orderly movement of the rupee in finding its correct value and at the same time in ensuring that there is no excessive volatility”
financialexpress.com
Sources
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