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The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) started deliberations on Wednesday this week on the keenly awaited monetary policy amidst expectation of 50 basis points hike in interest rate to check inflation and improve foreign capital inflow to arrest declining value of rupee against the US dollar.
The decision of RBI Governor Shaktikanta Das headed six-member MPC will be announced on today. While inflation remains high, the Indian rupee is sliding sharply, the US dollar and was currently trading near 82 against the greenback. The rupee depreciation has hastened following the US Fed raising their interest rate thrice by 75 basis point each in the recent past. Other major central banks too have become aggressive in raising rates.
Besides inflation, the RBI is also likely to come out with steps to shore up foreign capital inflows to check the declining value of the rupee against the US dollar. Forex reserves have declined by USD 86 billion to USD 546 billion (from their highs last year).
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