Rupee Strengthens past 67 per US Dollar Mark
The Indian Rupee trades at 66.99 per Dollar compared with its previous close of 67.10. The Indian Rupee on Tuesday strengthened past 67 marks against US dollar before the start of US Federal Reverse Bank’s two day meeting.
Today Morning 9:09am, the Indian rupee was trading at 66.99, up 0.18% from the previous close of 67.10 per US dollar. Since the starting of the year, the Indian currency has lost 5.80%.
Reserve Bank of India Governor Raghuram Rajan feels that the US Fed to increase interest rates by more than quarter point. However, The US Federal Reserve Bank meeting is to be held on Tuesday and Wednesday. Traders have fear that the US Fed may increase the interest rates after nonfarm payroll record, which could encourage dollar outflows from developing markets, market includes India also.
The present Parliament winter season is to be washed out as the ruling government and opposition Congress party are not able to solve their different opinions on the proposed Goods and Service Tax (GST).
US Fed may Increase the Interest Rates
From 30 October to 11 December, Foreign institutional investors (FIIs) have sold US $1.85 billion in equities. Since the starting of this year, FIIs have bought US $2.75 billion from local equities and US $8.14 billion from bond. FIIs were net sellers in 25 out of the last 28 market sessions.
Reserve Bank of India is likely adopting a wait and watch theory before proceeding with any future interest rate cuts. India’s retail inflation rose to 5.41% in the month of November due to hike of food products price. Separate report released by the government showed that increase based on wholesale price index drop at -1.99% in the month of November.
Asian Currencies were trading mixed; Indonesian Rupiah was up 0.41%, China offshore at 0.1%, South Korea spot 0.18%. And the dollar index, which measures the US dollar strength against all major currencies, was trading at 97.552, down 0.05% from its last close at 97.604.