Indian Rupee Falters Amid Global Economic Pressures and Rising Inflation

The Indian Rupee (INR) has been struggling, down about 6.5% year-to-date against the US Dollar (USD), and trading near historic lows ahead of the Reserve Bank of India's (RBI) October meeting.

Economists expect a 25-basis-point rate hike next month, followed by another increase in December to counter rising retail inflation.

India's inflation based on the Consumer Price Index accelerated to a provisional 4.82% year-on-year in August, strengthening the case for a rate hike.

The RBI may raise its repo rate to combat rising inflation and strong economic growth, but interest rate hikes might do little to save the Indian Rupee amid mounting macroeconomic pressures from intense geopolitical tensions in West Asia and subsequent global energy shocks.