New Delhi, Sep 25 (PTI) The Indian rupee sliding to a historic low of 81.09 to a dollar will make import of crude oil and other commodities expensive further fueling inflation which for the past several months has remained above the Reserve Bank's upper tolerance level of 6 per cent.
The pressure on the domestic currency, which is mainly due to repeated hikes in interest rate by the US Fed, is likely to continue with rise in trade deficit and gradual withdrawal of funds by institutional investors.
The Reserve Bank, which is scheduled to announce its bi-monthly monetary policy later this week, is expected to increase the repo-rate or the short-term lending rates by 50 basis points in a bid to tame inflationary pressure.
