Rupee opens at one week high, up by 11 paise

Fed delivered a rate hike of 25 basis points, accompanied with an accommodative policy statement.

Indian Rupee opened higher by 11 paise at 66.62/$ in early trade on Thursday, as against the previous close of 66.73/$. The US Fed delivered a rate hike of 25 basis points, accompanied with an accommodative policy statement. Fed stated that the improvement in economic conditions warrant a rate hike after a gap of literally a decade. Rise in consumer spending, strength in housing market and business fixed investment reflects improving confidence in the economy.

On domestic front, RBI’s intervention in the Forex markets has also stabilized the domestic unit to a certain extent.  Last week, RBI also announced plans of intervening in the exchange traded currency derivate markets in order to shield the currency from the volatility and repercussions of US Fed rate hike. RBI’s involvement in Forex markets will ensure that downside in Rupee remains capped.

On Wednesday, Indian rupee ended at 66.73/$, higher by 19 paise. The currency touched a high and low of 66.74 and 66.80 respectively. The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.99 and for Euro stood at 73.46 on December 14, 2015. While, the RBI’s reference rate for the Yen stood at 55.29, the reference rate for the Great Britain Pound (GBP) stood at 101.7840.