Indian Rupee: Expected To Recover Amid Dollar Weakness

28 Jul 2022 , 08:57 AM

The Indian rupee is expected to see good recovery on the back of sharp weakness in the US dollar overseas. The dollar index is languishing near a week low at 106.08, tracking lower treasury yields following Fed rate decision. The Federal Reserve on Wednesday announced its decision to raise interest rates by 75 basis points. The Fed said it decided to raise the target range for the federal funds rate to 2.25 to 2.50 percent in an effort to achieve its dual goals of maximum employment and inflation at a rate of 2 percent over the longer run. The decision to continue raising interest comes even though the Fed acknowledged that recent indicators of spending and production have softened, leading to concerns about a potential recession. On Wednesday, INR declined 13 paise to close at 79.91 against the US dollar. At the interbank foreign exchange market, the local currency opened at 79.83 and finally ended at 79.91, down 13 paise over its previous close. On Tuesday, the rupee had settled at 79.78 against the American currency. Domestic equity benchmarks ended with strong gains on Wednesday. The barometer index, the S&P BSE Sensex, advanced 547.83 points or 0.99% to 55,816.32. The Nifty 50 index gained 157.95 points or 0.96% to 16,641.80. Foreign portfolio investors (FPIs) sold shares worth Rs 436.81 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 712.03 crore in the Indian equity market on 27 July, provisional data showed Overseas, Asian stocks are mostly higher on Thursday following the U.S. Federal Reserves decision to raise rates by 75 basis points to fight inflation, a move that was widely expected. US stocks rallied Wednesday after the Federal Reserve announced its much anticipated rate increase to fight inflation, but hinted that it could slow the pace of its hiking campaign at some point. Powered by Commodity Insights