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Rupee ends considerably weaker; Fed decision eyed

15 Jun 2022 Evaluate

Indian rupee ended considerably lower against dollar on Wednesday on emergence of demand for the greenback from importers. Investors were taking cautious approach ahead of US Fed meet outcome later today. Traders were worried after India's trade deficit widened to a record $24.29 billion in May 2022 from $6.53 billion in the same month last year due to a sharp jump in the country's imports. The merchandise trade deficit in May 2022 is the highest ever monthly gap. On a year-on-year basis, it has surged by 271.96 per cent. Traders took note of report where Fitch Ratings in its update to Global Economic Outlook has said the Reserve Bank of India (RBI) may raise interest rates further to 5.9 per cent by December 2022, on deteriorating inflation outlook. It stated India’s economy faces a worsening external environment, elevated commodity prices, and tighter global monetary policy. On the global front, euro jumped after the European Central Bank's governing council said it would hold an unscheduled meeting on Wednesday to discuss the recent sell-off in government bond markets, hours ahead of a closely-watched meeting of the U.S Federal Reserve.

Finally, the rupee ended at 78.22 (Provisional), weaker by 18 paise from its previous close of 78.04 on Tuesday. The currency touched a high and low of 78.22 and 77.99 respectively.

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