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Indian Rupee Drops to One-Week Low as Central Bank Raises Rates

India’s rupee fell to a one-week low after overseas investors cut holdings of local shares on concern rising interest rates will boost costs and erode earnings at the nation’s companies.

The Reserve Bank of India raised its benchmark repurchase rate to 7.25 percent from 6.75 percent today to slow inflation, the ninth increase since March 2010. Only seven of 25 economists in a Bloomberg News survey predicted the move, while the rest expected a quarter-point increase. Foreigners’ sales of Indian stocks exceeded purchases for the fifth day on April 29, the longest stretch in three months, exchange data show.