- Indian Rupee (INR) falls after gains yesterday
- The RBI left rates unchanged at 5.5%
- US Dollar (USD) rises versus major peers
- US government shutdown continues
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising after losses yesterday. The pair fell -0.18% in the previous session, settling on Wednesday at 88.68. At 19:30 UTC, USD/INR trades 0.05% higher at 88.73 and trades in a range of 88.61 to 88.85.
The Indian rupee is falling after the Reserve Bank of India left its policy rate unchanged on Wednesday, but signaled that there was still room to lower rates in December if deemed necessary.
The six-member Monetary Policy Committee voted unanimously to keep the repo rate at 5.50% and retained a neutral policy stance. The central bank continues to assess the impact of Trump’s tariffs on the economy.
India has faced tariffs of 50% on imports into the US on key sectors, including textiles and chemicals. However, consumer tax cuts announced by Prime Minister Modi are expected to boost growth and suppress inflation.
The central bank had cut the repo rate by 100 basis points in the first half of this year, but has paused rate cuts since August.
The US Dollar is rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading up 0.18% at 97.88, snapping a four-day losing streak.
The U.S. dollar is rising, rebounding after recent losses as investors weigh the potential economic fallout from the U.S. government shutdown.
The US government continues to be shut down for a second day. President Trump has threatened to use the shutdown to review Democratic agencies that could be cut in an effort to pressure the Democrats into ending the funding stalemate, which began yesterday. This could mean the cutting of thousands of jobs.
The disruption has already delayed the release of weekly jobless claims, which were scheduled for today, and tomorrow’s nonfarm payroll report is also likely to be postponed.
Yesterday, the ADP payroll report was significantly weaker than expected, fueling expectations that the Federal Reserve will cut interest rates at its October meeting.