Mumbai: Indian rupee on Thursday declined 16 paise to 67.08 against a strengthening US dollar in early trade after the RBI hiked key lending rate or repo rate by 25 basic points to 6.25%.
On Wednesday, the six-member monetary policy committee unanimously voted to hike repo rate by 25 basis points. The last time this benchmark hike was noticed in January 2014.
The increase was considered the first interest rate hike in a four-and-a-half years, since the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government came to power in May 2014.
The rupee had ended at a fresh one-month high of 66.92 on Wednesday, surging 23 paise against the US dollar, reports said.
An RBI release said the decision of the MPC, led by RBI governor Urjit Patel, was consistent with its neutral monetary policy stance, keeping with its objective of achieving 4% (+/-2%) retail inflation in the medium term.
Next meeting of the Monetary Policy Committee of the RBI will be conducted on July 31 and August 1.
