Rupee Falls to 96.01 as Fed Hikes Rates
The Indian rupee opened 6 paise lower at 96.01 per dollar on September 17. The move followed the US Federal Reserve's decision to raise interest rates by 25 basis points.
The Indian rupee opened at 96.01 against the US dollar on September 17. This represents a drop of 6 paise from the previous close of 95.95. The decline occurred after the US Federal Reserve raised its benchmark interest rate by 25 basis points. The central bank also signaled potential for further tightening at the next meeting.
The dollar index rose to 100.35 following the rate decision. Most Asian currencies weakened against the greenback in early trade. Brent crude oil prices remained slightly lower but held above recent lows. US 10-year Treasury yields dropped by 2 basis points to 4.99%.
Asian Currencies Show Mixed Performance
The Malaysian ringgit recorded the steepest decline among major Asian currencies. It fell by 0.57% in early trading sessions. The Taiwan dollar followed with a decrease of 0.30%. The South Korean won dropped by 0.25% against the dollar.
The Philippine peso and Thai baht also weakened marginally. The Indonesian rupiah slipped by 0.01%. In contrast, the Japanese yen gained 0.10% against the dollar. China’s renminbi rose by 0.05%, while the Singapore dollar edged up by 0.04%.
Market Expectations for Rupee Movement
Finrex, cited by GN markets/fx (en-US), projected the rupee to open near 96.02 per dollar. The Reserve Bank of India is expected to remain active in the non-deliverable forward market. The central bank may intervene to manage volatility in the currency pair.
The rupee faces near-term pressure from a stronger US dollar. Weakness in other Asian currencies, particularly the Korean won, adds to this pressure. Prevailing risk aversion in global markets contributes to the currency's softness. Exporters are expected to continue selling dollars for up to 12 months.
Dollar Strength Drives Global Rates
The US dollar held onto its gains from the previous trading day. The currency index hit a one-month high after rising 0.5% on Wednesday. This strength persists as the Fed signals a hawkish stance on future monetary policy. The move reflects broader market expectations of sustained higher interest rates in the United States.
