The Indian rupee gained as much as 16 paise against US dollar in the early trade on Thursday after America's Federal Reserve hiked the interest rates in its latest policy meeting concluded on Wednesday.
The Indian rupee gained as much as 16 paise against US dollar in the early trade on Thursday after America’s Federal Reserve hiked the interest rates in its latest policy meeting concluded on Wednesday. The rupee gained strength on Thursday after a bumpy ride for two days as retail inflation spiked to a 15-month high level. The Federal Reserve policymakers on Wednesday hiked the key policy rates by 25 basis points to 1.5% from 1.25% earlier. This was the third time in 2017 when US Federal Reserve had raised the interest rates, implying a total of 75 bps rise with a 25 bps hike in three policy meeting through the year. The domestic currency rupee jumped 16 paise at 64.28 against the US dollar today.
“As expected, Federal Reserve policymakers ended their two-day meeting Wednesday by raising the federal fund rate what banks charge each other for short-term loans by 0.25% points to a still-low range of 1.25 to 1.5%, Associated Press said in a report. The rupee ended down 4 paise against US dollar on Wednesday due to increased worries as retail inflation touched a 15-month high on Tuesday. In her final move as the US Federal Reserve Chairperson, Janet Yellen hiked rates citing solid job growth and household spending in the United States. The American central bank kept its policy outlook unchanged on additional increases for 2018 and 2019.
Earlier on Tuesday this week, the Central Statistics Office (CSO) released the two key macroeconomic data — Consumer Price Index (CPI) for November and Index of Industrial Production (IIP) for October. The retail inflation for November surged to a 15-month high at 4.88%, breaching the 4% target set by the Reserve Bank of India, from 3.58% in the previous month, government data showed on Tuesday.
Meanwhile, Sensex and Nifty opened marginally higher on Thursday tracking Asian peers as most of them ticked up in the early morning session today. NSE Nifty gained 36.35 points to start at 10,229.3 whereas BSE Sensex added 61.65 points to begin at 33,114.69. Shares of Infosys and HDFC Bank were the notable contributors to the Sensex, while on the other hand, a downtick in shares of Tata Consultancy Services and HDFC capped the gains. The macroeconomic data-packed week is about to conclude with wholesale inflation figure lined up today, along with the balance of trade and forex reserves due tomorrow. After opening little higher, key equity indices Sensex and Nifty traded dull as investors were little cautious ahead of WPI figures for inflation, food, fuel, manufacturing, for the month of November are all set to be released by 12 noon today.