Rupee Falls To 2-Month Low Of 96.57 Against US Dollar After RBI Rate Hike | Economy News

Last Updated:October 07, 2026, 11:29 IST

The rupee opened at around 96.37 against the US dollar and subsequently weakened to 96.57, its lowest level in nearly two months.

Rupee Vs Dollar.

The Indian rupee slipped to a two-month low of 96.57 against the US dollar on Wednesday, October 7, after the Reserve Bank of India (RBI) raised the policy repo rate by 25 basis points to 5.50%.

The rupee opened at around 96.37 against the US dollar and subsequently weakened to 96.57, its lowest level in nearly two months. The currency’s movement was also influenced by demand for the US dollar and broader global market cues.

The domestic currency weakened despite the RBI’s rate hike, with market participants assessing the impact of tighter monetary policy on economic growth, capital flows and overall market sentiment.

The RBI Monetary Policy Committee (MPC), headed by Governor Sanjay Malhotra, unanimously voted to increase the policy repo rate by 25 basis points to 5.50%. The central bank also changed its monetary policy stance to calibrated tightening. The RBI indicated that, given the prevailing economic conditions, rate cuts are off the table in the near term and future policy action would be either a rate hike or a pause, depending on incoming data and the economic outlook.

A higher domestic interest rate can, in theory, support a currency by making local assets more attractive to foreign investors. However, the rupee’s movement depends on several factors, including the US dollar’s global strength, crude oil prices, foreign fund flows and demand for dollars from importers.

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What caused the Indian rupee to slip to a two-month low against the US dollar?

The Indian rupee fell to a two-month low of 96.57 against the US dollar after the Reserve Bank of India raised the policy repo rate by 25 basis points to 5.50%. The currency’s movement was also impacted by strong demand for the US dollar and broader global market cues.

Who heads the RBI Monetary Policy Committee that voted to increase the repo rate?

The RBI Monetary Policy Committee is headed by Governor Sanjay Malhotra.

What is the current stance of the RBI regarding future interest rate cuts?

The Reserve Bank of India changed its stance to calibrated tightening, indicating that rate cuts are currently off the table in the near term. Future policy actions will either be a rate hike or a pause based on incoming economic data and the outlook.

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Mohammad HarisDeputy News Editor (Business)

Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More

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