Rupee drops by 26 paise to 64.53 against USA dollar

Rupee hits 10-week low against US dollar in opening trade
Sensex tanks 180 pts, rupee hits 10-week low as US Fed holds interest rate
Author

22 September, 2017

The BSE Sensex opened flat on Thursday but soon tanked as much as 180 points, Nifty slipped below the 10,100 mark and rupee hit a 10-week low as the US Federal Reserve left interest rates unchanged, but signalled it expects another interest rate hike by year-end. "Towards the end of the day we believe the Reserve Bank of India might have intervened at around 64.80 levels", said a currency dealer with a foreign bank.

The policy statement and accompanying projections showed the Fed is still in the middle of a balancing act between an economic recovery that has kept U.S. unemployment low and is gaining steam globally and a recent worrying drop in United States inflation.

The Fed also chose to begin shrinking its USD4.5 trillion balance sheet starting October, but said the process would be gradual and predictable, initially allowing USD10 billion in bonds to roll off each month.

Asian stocks are trading mixed and US Treasury yields spiked while oil prices hovered near four-month highs ahead of Friday's meeting between OPEC and non-OPEC producers. So far this year, it has risen over 21.09%. The fall of the currency in early trade gathered momentum at around noon when it further plunged 20 paise in 20 minutes following reports of fiscal stimulus by the government. South Korean won was down 0.39%, Malaysian ringgit 0.32%, Indonesian rupiah 0.29%, China renminbi 0.23%, Japanese yen 0.21%, Singapore dollar 0.21%, Taiwan dollar 0.11% and Thai baht 0.1%.

The WSJ Dollar Index, which measures the US currency against 16 others, ticked up less than 0.1% to 85.65 after rallying 0.4% a day earlier.


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