Rupee likely to weaken more on rate-cut bets as RBI loosens grip

THE RUPEE IS expected to weaken further against the dollar, after hitting a new low on Monday, as traders bet on interest-rate cuts amid signs the Reserve Bank of India (RBI) is loosening its grip on the currency under its new chief.

- SUBHADIP SIRCAR

The RBI will reduce the repurchase rate by 25 basis points on Friday, the first easing since the pandemic, a Bloomberg survey of economists showed. That will add to pressure on the currency after US tariffs rattled Asian markets.

The rupee may decline to 88.70 per dollar by the year-end, according to Australia and New Zealand Banking Group. Emkay Global Financial Services is forecasting a fall to 89.50 by December. It fell as much as 0.8% to 87.29 after markets opened on Monday after the Budget on Saturday.