Rupee slips on inflation forecast

The rupee weakened further by 14 paise to close at 64.52 against the U.S. dollar after the RBI kept rates unchanged and raised the inflation forecast.

Besides, heavy capital outflows in anticipation of a rate hike by the U.S. Federal Reserve and a strong dollar overseas largely ruled forex market sentiments. Though the RBI’s policy outcome was in line with expectations, upside risks emanating from high commodity prices against the backdrop of global headwinds added pressure on the trading front. Growing worries over higher government borrowings this fiscal and apprehensions over fiscal slippages also weighed on trade.