Traders remained cautious ahead of the Reserve Bank of India's policy meet scheduled later this week. Five of the six panel members voted to leave the rate unchanged. "The changed stance indicates that in the current rate cycle RBI has only two options- hike rates in the next policy meeting or keep it unchanged".
If the RBI does raise rates, it would be the latest in a series of emerging market central banks that have been pressured into tightening policy in response to a tumbling currency.
"The RBI policy announcement of keeping rates unchanged is a surprise", said Abhimanyu Sofat, head of research, at brokerage firm IIFL Securities Ltd, adding that if crude prices continue to surge then RBI may have to may have to frontload rate hikes.More news: Jewish Kavanaugh accuser says his ascension to Supreme Court 'unthinkable'
She said: "For bond markets, a 25 bps hike accompanied by a hawkish stance could trigger the 10-year bond yield to rise to 8.25 percent".
After opening at new-record low of 73.26, the Indian currency further dropped to 73.41 per dollar. The rupee has depreciated almost 15 percent this year, becoming the worst-performing currency in Asia apart Indonesia and the Philippines.
Tweeting in Hindi, the Times of India reported that he said: "The rupee has crossed the 73 mark and price rise is causing an outcry". Higher prices have swollen India's current account deficit, which last stood at around 2.4 per cent of GDP, in the April-June quarter.More news: Lewis Hamilton is totally focused on winning World title says Toto Wolff
"The biggest policy anchor for rupee is high real rates". Weaker long-term sentiment has weighed on the won, which is closely tied to China though Korea's electronics exports, which may be at risk from the US-China trade war. "It is, therefore, imperative to further strengthen domestic macroeconomic fundamentals".
Gandhi Wednesday hit out at Prime Minister Narendra Modi questioning his silence over the falling value of the Indian Rupee.More news: USA vice president says China interfering in American politics