The Indian rupee fell by 18 paise against the US dollar to a record low of 85.12 on the National Stock Exchange (NSE) over the US Federal Reserve's (Fed)'s hawkish comments on the prospect of interest rate cuts.
At Wednesday's Federal Reserve meeting, the focus shifted to maximum employment and price stability, with the FOMC halving the number of rate cuts expected in 2025.
After the US Federal Reserve's decision, the dollar appreciated significantly, and the dollar index exceeded the 108 level. Apart from the Indian currency, the impact was also felt in other foreign currencies.
The Indian currency opened weak at 85.06 rupees against the dollar. Investor sentiment was affected by a weak domestic stock market, importers' demand for dollars, and the withdrawal of foreign capital.
The Indian rupee closed at a record low of $84.94 against the US dollar on the previous business day.
Experts said, “The dollar index rising above 108 and the 10-year bond yield sharply rising to 4.52% are negative from the FII capital flow perspective.However, this is temporary. It's just a thing,” he said.
After the Federal Reserve's decision, the Dow Jones Industrial Average fell 2.58% to close at $42,326.87. The S&P 500 fell 2.95% to 5,872.20, and the Nasdaq fell 3.56% to close at 19,392.69.
Foreign institutional investors (FIIs) sold shares worth Rs 1,316.81 crore in India on December 18, while domestic institutional investors bought shares worth Rs 4,084.08 crore on the same day.
Indian stock markets opened lower on Thursday. At around 1:14 pm, the Sensex was trading at 79,300.6, down 881.51 points or 1.10 per cent, and the Nifty was trading at 23,966.15, down 232.70 points or 0.96 per cent.
