Indian central bank chief Raghuram Rajan’s surprise move to raise the policy interest rate adds pressure on Prime Minister Manmohan Singh to take politically challenging steps to boost economic growth as elections near.
India’s central bank is set to raise the benchmark repurchase rate and cash reserve ratio at its meeting tomorrow in a move to defend the rupee, according to the chairman of the nation’s biggest lender.
Yes Bank Ltd., the best-performing Indian bank stock last year, has lost almost half its market value in less than a month on investors’ concern that a record surge in interest rates will erode profits and boost defaults.
India’s central bank will not compromise on its fight against inflation to address a cash deficit in the banking system, Deputy Governor Subir Gokarn said, indicating that policy makers will refrain from cutting the amount lenders need to set aside as reserves.
Indian stocks dropped for a fourth day, the longest losing run in two months, after the nation’s biggest bank said the central bank may raise interest rates and Hindustan Unilever Ltd. slid on analysts downgrades.