Rupee declines by 25 paise against USD on rate hike worries, forex outflows

Mumbai: The rupee declined by 25 paise to close at 76.42 against the US currency on Friday due to forex outflows and a stronger dollar which touched its 25-month high levels on expectations of a 50-basis point rate hike by the US Federal Reserve in May.
Losses in domestic equity markets also dented the investor sentiment, forex dealers said.
At the interbank forex market, the rupee opened sharply lower at 76.31 against the greenback and lost further ground during the session. The domestic unit witnessed an intra-day high of 76.19 and a low of 76.50.
The rupee closed at 76.42 to a dollar, down by 25 paise over its previous close of 76.17.
The rupee has weakened by 23 paise this week to Friday.
The dollar index touched its 25-month high level against a basket of world currencies on Friday before trading at 100.84 on expectations of a 50 basis point hike by the US Fed in May.
“I would say that 50 basis points will be on the table for the May meeting,” Federal Reserve Chairman Jerome Powell said in an IMF panel discussion.
The rupee gave up its weekly gains after Federal Reserve Chairman Jerome Powell said that a 50 basis-point rate hike was on the table for the May meeting as the central bank aims to curb elevated inflation in the US, Emkay Global Financial Services said in a note.
The US Dollar index erased its losses after the comment from the Fed chairman and jumped towards 100.90 levels again, Emkay Global noted. —PTI

Leave a Reply

Your email address will not be published.