The rupee was quoted at 83.0250 to the U.S. dollar, down about 0.1% from the previous session. On the interbank order matching system, before the normal OTC opening time of 9.00 a.m., the rupee had dropped to 83.16. The RBI likely sold dollars to pull the rupee back near the 83 level.
Indias risk of stagflation, when economic growth stagnates while prices increase rapidly, is low despite prices surging, according to the Reserve Bank of Indias (RBI) August bulletin. A study for the central bank found the probability of stagflation in India was just 3%, due to easing financial conditions, stable INR/USD forex rates and steady domestic fuel prices.