Indian rupee ended lower against dollar on Thursday as hawkish stance of the US Federal Reserve affected investor sentiments in emerging markets. Sentiments were fragile with private report stating that the yield on the 10-year government bond inched up to nearly 7 per cent ahead of the Reserve Bank of India’s (RBI) monetary policy review scheduled for Friday on fears that the central bank may raise the inflation forecast. Some concern also came with another private report stating that India’s central bank will likely raise its inflation outlook this week to reflect costlier oil, but leave borrowing costs steady and tap other policy tools it’s used before to support an economy facing new risks to recovery. Heavy sell-off in Indian equity markets also weighed on sentiments. On the global front, dollar was heading towards a two-year high against a basket of major currencies on Thursday after meeting minutes showed the Federal Reserve preparing to move aggressively to fight inflation, while commodity-linked currencies fell further.
Finally, the rupee ended at 76.03 (Provisional), weaker by 19 paise from its previous close of 75.84 on Wednesday. The currency touched a high and low of 76.03 and 75.78 respectively.
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