The monetary unit of India advanced from its lowest value in about 60 days against the world’s reserve currency after the central bank implemented a surprise increase in borrowing costs, according to Bloomberg.
After having checked in at 7.75 percent, the repurchase rate climbed to 8 percent. Only three of 45 analysts and economists surveyed by the news service said they believed that increase by the Reserve Bank of India was coming as all others believed the rate would remain intact. The central bank of the subcontinent said it does not intend to implement additional intervention during the near term, according to Bloomberg.
“The RBI did what was needed,” chief executive officer Andrew Holland with Ambit Investment Advisors Pvt. In Mumbai told the news source on Tuesday. “The rate increase will help the rupee if the Fed tapers more.”
The Indian rupee climbed about 0.2 percent against the greenback on Tuesday, rising from its lowest value since the middle of this past November during the Monday trade session.
CNN reports though the interest rate increase was not expected, it marked the third time the central bank has spiked rates since September of last year.
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