The rupee may fall further against the US dollar, prompting the Reserve Bank to adopt "orthodox" monetary policy like hike in interest rate to check depreciation of the domestic currency, an SBI report said Tuesday.


The rupee Tuesday slumped 16 paise against the American unit to trade at a life-time low of 71.37 on strong demand for the dollar. In its research report 'Ecowrap', SBI said given the "inefficacy" of sterilised intervention, RBI may follow a relatively hands off policy in forex market for now.


"The rupee has now depreciated by 6.2 per cent since June 2018 when RBI started hiking rates. Even as the decline is in consonance with strengthening of the dollar, we believe it may continue further," the report said. It noted that there has been a spate of RBI communications in recent times which have perhaps gone unnoticed by the market. -- PTI