HSBC and Nomura analysts say the rate hike bolsters the RBI’s credentials on the inflation-fighting front, which will have a rub-off effect on the rupee.
The rupee is Asia’s worst performing currency this year, and it will be further affected by higher global crude oil prices. The central bank may need to act early to maintain macro-economic stability.
Standing up to America is usually not a personal risk for a leader in India. Any suggestions of foreign pressure unites India behind who they see as leading them in that fight.
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