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RBI to follow suit as US Fed raises 75 bps: Experts
The RBI may also look at various domestic and global factors before deciding on a rate hike. Impact on rupee The rupee, which has been under pressure in the last few months, is expected to depreciate further as dealers expect the Fed’s rate hike will attract more funds to the US. Between April 1 and October 31, the rupee depreciated 8 percent while the dollar rose 13 percent. The long end of the curve will be under pressure (but remain range bound) from higher US yields and rising domestic policy rates and significant supply of government bonds,” Sakshi Gupta, principal economist, HDFC Bank said. While the market has already discounted the rate hike by the Fed, on Wednesday, the yield on the 10-year benchmark 7.26 percent bond maturing in 2032 was trading at 7.4616 percent. Source - Money Control
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