MUMBAI: An emerging-market selloff that’s hit India hard presents its central bank with a dilemma: hold interest rates steady to keep the economy motoring or follow the example of the Philippines and Indonesia by raising them to stem market pressure.
The rupee has dropped about 5% against the dollar this year and yields have spiked on government and corporate bonds. While those moves would argue for a rate increase, most economists aren’t convinced it will come today.
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