RBI says rate hike wasn't meant to boost rupee; analysts say it will

Historically, India has seen more inflows into its equity markets, which respond positively to rate cuts

Reserve Bank of India Governor Urjit Patel signaled that Wednesday's interest-rate hike was not aimed at defending the rupee. Analysts say that the move will still provide the much-needed support to the currency.

For HSBC Holdings Plc and Nomura Holdings Inc., it bolsters the RBI's credentials on the inflation-fighting front, which they say will have a rub-off effect on the rupee. Morgan Stanley says it has turned tactically bullish on the currency following the first increase in the benchmark rate since 2014.

India's restrictions on overseas investment in its bond market mean that the link between higher rates and the currency isn't