The rupee has become the third worst-performing currency in Asia.
There were expectations that hiking interest rates could slow rapid inflation in the country. Rising crude oil prices have wreaked havoc on India’s economy because it’s one of the world’s largest importers.
“A large number of international factors … have had a significant impact in markets across the world, and we’ve also been impacted because of that,” Arun Jaitley, India’s finance minister, said.
India’s benchmark Sensex index lost 900 points Friday and has fallen 8 percent in the past month.
The Reserve Bank of India did change its stance from neutral to calibrated tightening, which means it has two options: status quo or rate hike.
Analysts said the rising oil prices are hampering growth and raising interest rates may be inevitable.