Rupee rallies 69 paise, settles below 70-mark as US Fed lowers projection for future rate hikes

Mumbai: The rupee strengthened further by 69 paise to close at 69.70 against the US dollar on Thursday as the Fed raised the interest rate but lowered its projection for future hikes. Tumbling crude oil prices and sustained selling of the greenback by exporters and banks gave further impetus to the local unit, forex dealers said. This is the fourth straight session of gains for the rupee, during which it has rallied by a hefty 220 paise. [caption id=“attachment_4336479” align=“alignleft” width=“380”] Representational image. News18.[/caption] At the Interbank Foreign Exchange (forex) market, the local unit opened lower at 70.63. It touched a high of 69.65 on robust dollar selling, before finally finishing at 69.70, up 69 paise from its previous close. The US Federal Reserve raised its key interest rate for the fourth time this year, and signalled more next year, albeit at a slower pace than expected. The quarter-point increase, to 2.25-2.5 percent, lifted the Fed’s key rate to its highest point since 2008. “Fed slashed the interest rate hike trajectory for CY19 to two from four in 2018, which is positive for an emerging market to attract liquidity,” said Vinod Nair, Head of Research, Geojit Financial Services Ltd. Globally, Brent crude, the international oil benchmark, was trading at USD 55.45 per barrel, down 3.13 percent. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.2835 and for rupee/euro at 80.0548. The reference rate for rupee/British pound was fixed at 88.8454 and for rupee/100 Japanese yen at 62.79. On a net basis, foreign portfolio investors (FPIs) sold shares worth Rs 386.44 crore Thursday, provisional data available with BSE showed. Snapping a seven-day rising streak, equity benchmarks finished with mild losses Thursday. The BSE Sensex, which had dropped more than 250 points in morning trade, finally finished 52.66 points, or 0.14 percent, lower at 36,431.67. The broader NSE Nifty slipped 15.60 points, or 0.14 percent, to 10,951.70.