Indian Discussion Forum

The rupee also rose as investors bet the Reserve Bank of India will increase borrowing costs on January 29, spurring capital inflows into the higher-yielding local currency. The bank is likely to raise the cash reserve ratio by 50 basis points to 5.5%.

“I don’t see any more downward pressure on the rupee now, except for some month-end demand from oil importers, as monetary tightening should help,” said PV Rao, head of foreign-exchange trading at IndusInd Bank in Mumbai. “There was heavy dollar selling by exporters and corporates as everyone was waiting for these levels.”