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Market Spotlight

The droopy rupee: Can India's currency be revived?

Central bank rate rise expected this week as inflation menaces economy

KIRAN SHARMA, Nikkei staff writer | India

NEW DELHI -- India's central bank is expected to announce another rise in interest rates at the end of a three-day policy meeting that begins Monday, but economists and traders aren't betting it will ease the slide of the rupee.

The currency suffered its fifth monthly decline in a row in May, amid relentless selling by foreign institutional investors, slowing economic growth, and a spike in inflation that alarmed the Reserve Bank of India so much it delivered an unexpected rate increase between meetings on May 4.

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