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Rupee is down 88 paise to close at its all-time low of 80.86 against USD

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The rupee depreciated 88 paise to close at an all-time low of 80.86 against the US dollar after the US Federal Reserve raised interest rates and dropped hints that more would come in its war on inflation.



Against the US dollar, the rupee ended at 80.86 on Thursday against 79.98 on Wednesday.

“The rupee fell after the aggressive comments from the… fed which saw a 75 basis point increase for the third consecutive time, along with forecasting tighter policies needed to contain high inflation,” said Jateen Trivedi, Research Analyst at LKP Securities.

Trivedi, the US dollar index, rose above its 20-year high to reach more than $111.50 in afternoon trading, reflecting the effect of the rupee falling more than 1 percent from 79.95 to 80.77.

“We believe that the current downward trend in the rupee could continue for a while, even after strong domestic fundamentals. The local currency will react to a stronger greenback, but there may be an outperformance between the regional currencies. Spot USDINR now has resistance in area of ​​81.25 against 81.40 while the previous top 80.12 would act as support,” said Dilip ParmarResearch Analyst, HDFC Securities.

The Japanese yen also fell, falling below 0.6860.

The US Fed raised interest rates by 75 basis points to 3-3.25 percent. It was the third consecutive 75 basis point increase, as Fed chairman Jerome Powell reiterated the central bank’s commitment to curb inflation.

The dollar index, which measures the dollar’s strength against a basket of six currencies, rose 0.41 percent to 110,793.

In addition to the Fed’s aggressive stance, the US dollar expanded its gains against its major crosses after the Russian president Vladimir Putin partial military mobilization announced.

The price of Brent crude was $90.52 a barrel.

Meanwhile, Indian stocks fell Thursday after the US Fed became more aggressive than expected, dealers said.

Sensex closed 337.06 points or 0.57 percent lower at 59,119.72, while useful finished 88.55 points or 0.50 percent lower at 17,629.80. About 1,814 stocks moved up, 1,628 fell while 147 shares were flat on Thursday.

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