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RBI Signals Readiness to Act as Rupee Hits Record Low

The central bank signals it is ready to steady markets during an energy shock.

Overview

  • RBI Governor Sanjay Malhotra said the bank stands ready to use policy tools to keep markets orderly.
  • The rupee fell to a record low near 94.9 per dollar after briefly breaking 95 as oil surged.
  • Energy prices jumped after conflict in West Asia, raising India’s import bill and inflation risk.
  • Foreign investors have pulled about $26 billion from Indian stocks in a year, including roughly $20 billion since January.
  • Analysts split on next steps, with one camp favoring rate hikes to steady the rupee and another urging a pause to protect investment.