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HomeWorldIn a new lifetime, the rupee breached the 81 markAchi News

In a new lifetime, the rupee breached the 81 markAchi News

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Achi News Updates,

New Delhi: After the US dollar index strengthened to a two-decade high this week, the rupee fell to a lifetime low on Friday morning on hopes of increased demand for a safe-haven currency like the greenback.

This morning, the rupee fell by 25 paise from the previous session to touch a record high of 81.09 against the US dollar, which was at 80.86 at Thursday’s close. Yesterday’s depreciation was the rupee’s biggest one-day fall since February 24.

The U.S. Federal Reserve raised the repo rate by 75 basis points – in line with expectations, the third consecutive increase by the same amount, on the basis that investors will move to U.S. markets for better and stable returns amid monetary policy. tightens.

The central bank has indicated that more rate hikes are on the way, and that these rate hikes will continue until 2024. The U.S. Federal Reserve seeks to achieve maximum employment and inflation at a rate of 2 percent over the long term. A target range would be appropriate.

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Raising interest rates is a monetary policy tool that generally helps to suppress demand in the economy, thereby helping to reduce the rate of inflation. US consumer inflation eased to 8.3 percent from 8.5 percent in August, but remained above the 2 percent target in July.

Santosh Meena, Head of Research, Swastika Investmart, said from the latest action and commentary by the US Federal Reserve Bank, it is clear that the end of the rate hike cycle is still far from over and he feels the rupee will remain under pressure. Despite improvement in domestic economic prospects.

Meanwhile, India’s foreign exchange reserves fell to a two-year low. Reserves have fallen by nearly $80 billion since Russia-Ukraine tensions escalated into war earlier this year, and India’s foreign exchange reserves have continued to decline over the past few months. .

In general, the RBI intervenes in the market through liquidity management, including selling dollars, with a view to preventing rupee depreciation. As the rupee depreciates, the cost of imported goods increases.

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“The dollar index may continue its positive bias as the US Federal Reserve decided to raise interest rates by 75 bps for the third consecutive month and continue to raise rates at a faster pace this year to combat inflation. Running hot,” ICICI Securities said.

The post Exceeds Rs 81 in New Lifetime

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