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Why The Indian Rupee Continues To Rise

The Indian rupee continues to rise as consumer prices steadily decline, leading to cuts in benchmark interest rates, which are ultimately increasing economic growth measures. Since August of 2013, the Indian rupee has appreciated over 33% against fellow Asian currency, the Japanese yen, as is seen in the chart below.

(click to enlarge)

Data provided by Trading View

The Reserve Bank of India kept its benchmark lending rate unchanged in February after cutting the rate the month before to match falling inflation measures. In February, the benchmark lending rate came in at 7.75%, unchanged from last month's reading of 7.75%, as well as in line with estimates for 7.75%. Falling inflation measures, while leading to declining interest rates, have also added gains to real incomes and spurred spending.

"The outlook for growth has improved modestly on the back of disinflation, real income gains from decline in oil prices, easier