Impact of Fed interest rate hike on Indian economy

India Infoline News Service | Mumbai | March 15, 2017 18:09 IST

Chances of Fed rate hike which has been fuelled by low inflation as well as the decrease in counts of Americans filing unemployment benefits over last 5 months.

Chances of Fed rate hike which has been fuelled by low inflation as well as the decrease in counts of Americans filing unemployment benefits over last 5 months.
 
The upcoming Fed meet decision of possible interest rate hike has been widely anticipated. Foreign Institutional Investors (FII) have already been taking out their investment from Indian stock markets which is also a strong reason for continual stock market crashes. 

An indication of the rate hike by US Federal Reserve may invoke a series of rate hikes.
 
A streak of hikes in interest rates in U.S. will increase the borrowing cost for carrying trade resulting in a reduction of risk-adjusted return for U.S.
 
In the case of Indian currency & inflation scenario if U.S. rate hike occurs it may likely depreciate INR  resulting in boosting of exports.
 
Depreciated rupee will squeeze on inflation as India is a major importer of crude oil.    

Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.

 

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