Don’t want rupee to depreciate, aim to fight inflation: RBI

MUMBAI: The Reserve Bank of India in its policy meet today announced that it doesn’t intend the rupee to depreciate as it has left the interest rates unchanged. The central bank said its primary concern remains to fight inflation.

The central bank’s decision is in line with market expectations. Recently rating agency India Ratings had said any interest rate cut any time soon could trigger rupee depreciation.

“Any rate cut over the next six-nine months could profoundly impact corporates as an increase in interest rate may increase the debt servicing burden of several over-leveraged companies. Conversely, a rate cut need not be considered unequivocally positive, given the possible depreciation in rupee,” said Deep N Mukherjee, India Ratings senior director for corporate ratings.

The partially convertible rupee trimmed early gains and slipped to 60.89 per dollar after touching intraday high of 60.83 before the policy outcome.

It was up 4 paise against its previous close of 60.93 per dollar.

The rupee recovered sharply in trade yesterday following a short-covering led rally in Indian markets ahead of the RBI policy.