By Kimberley Kao and Fabiana Negrin Ochoa
There's growing speculation that the Indian central bank could be gearing up for its first interest-rate hike in three years in an attempt to arrest the rupee's relentless slide.
The currency is one of Asia's worst performers currencies so far this year, hammered by high oil prices stemming from the Middle East crisis that threaten to swell India's import bill and spur inflation.
Over the weekend, messaging from the U.S. spurred hopes that a U.S.-Iran peace deal is nearing. That would ease pressure on emerging-market currencies, but unless resolution happens swiftly, investors will likely continue avoiding risk and sell the rupee.
On Monday, the dollar was 0.3% lower at 95.37 rupees as the Indian currency clawed back ground after hitting its weakest level ever last week. That built on gains late last week that analysts largely attribute to Reserve Bank of India interventions.
