India Inflation Rises Due to Rupee Fall

India’s inflation rate rose by more-than-expected in July as a weaker currency brought higher import costs.

India’s main gauge of inflation, the Wholesale Price Index, rose 5.79% from a year earlier, up from 4.86% in June.

The Indian rupee has fallen 10% against the US dollar this year.

Policymakers have taken various steps in recent days to try and stem the rupee’s decline. Analysts said the latest data may see the central bank unveil further measures.

Last month, the Reserve Bank of India (RBI) on Monday hiked the interest rate at which it lends money to other banks and also put a cap on their daily borrowings.

It also tightened reserve ratio requirements for banks to curb the supply of rupees.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza