The currency pared some losses to touch a high of 72.90 per dollar on market speculation that RBI may open special dollar window for oil companies.
As per the RBI's fourth bi-monthly monetary policy statement, the key lending rates have been kept intact on the back of an uncertain global economic scenario. Government on Wednesday said that it will allow state oil marketing firms to raise $10 billion in overseas loans to help them deal with a sharp rise in crude oil prices and a falling rupee currency.
The greenback also shot to its highest so far this year on the yen and an all-time high against the Indian rupee. In a clear indication that it is not yet done with rate increases, the central bank changed its stance to "calibrated tightening" from "neutral" that was in place since February 2017, Bloomberg reported.
Thirdly, worldwide financial markets remained volatile with EME currencies depreciating significantly.
India's inflation rate was 3.69 per cent in August and is expected to go above the RBI's projected 5 per cent by June 2019 on higher fuel prices, the weak rupee and strong consumer spending.
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U.S. reports also say former classmates of the judge's who have stressed his heavy college drinking are not on the witness list. Mitchell to be more combative, but she was more interested in being thorough. 'How did you get there?' I don't remember.
Meanwhile, the BSE Sensex too plunged by 584.53 points, or 1.66 per cent, to 34,584.63 in late afternoon trade. One economist expected a 50 basis point hike to 7%.
"For bond markets, a 25 bps hike accompanied by a hawkish stance could trigger the 10-year bond yield to rise to 8.25 per cent", Rao told Reuters after yields surged on Thursday.
The central bank on Monday said it will infuse Rs 36,000 crore via bond purchases this month to meet the festive season demand for funds.
Anindya Banerjee, deputy vice president, currency derivatives at Kotak Securities, added: "The RBI is ready to keep real rates high because the policy mandate is to anchor inflation".