RBI keeps rates on hold; dovish tone weakens rupee
The Reserve Bank of India (RBI) left interest rates unchanged, but the rupee lost 1.8 per cent against the dollar in its deepest plunge in more than a month as investors worried that further measures will be needed to support a currency that is teetering close to a record low. The dovish tone struck in the RBI's policy statement had caused the rupee to sag, but it then crumpled when Governor Duvvuri Subbarao poured cold water on chances for a sovereign bond issue to help plug a yawning current account deficit.
