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Analysts at TD Securities point out that India raised import duties on a range of products in order to narrow the trade and current account deficit and support INR.

Key Quotes

“The 19 import products targeted are valued at INR 860bn in terms of imports in the financial year to March 18. Also RBI announced measures to ease the bank liquidity shortage by availing liquidity from the repo markets against high quality collateral (raising the liquidity coverage ratio to 13% from 11% effective Oct 1).”

“The immediate impact of these measures should be limited but it adds to the list of measures the government and RBI are implementing to protect the rupee and local markets. The problem however, is that unless oil prices stop rising its hard to keep the rupee from coming under further pressure.”