Inflation to Drive RBI’s Rate Action Rather Than Rupee, DBS Says

India’s central bank would increase interest rates in response to high consumer prices, and not due to a weaker currency as the rupee looks fairly valued at current levels, according to DBS Bank Ltd.

“If you take the central bank’s view, the rupee fall is not a concern,” DBS Bank Senior Economist Radhika Rao said in an interview with Bloomberg Television’s Juliette Saly and Yvonne Man on Friday. “It’s more of inflation focus that’s driving policy rather than what’s happening globally from Fed’s aggressive rate hiking cycle or just the currency.”