Rupee depreciates to new lifetime low; stocks decline for sixth day

Sep 28, 2022

New Delhi, Sept 28 (ANI): Continuing with the consistent depreciation, the rupee slipped further from the recent low and hit another lifetime low on Wednesday morning. This consistent depreciation follows the ongoing strengthening of the US dollar index for a two-decade high, on hopes that demand for safe-haven currency such as the dollar would pick up. The rising trade deficit, depleting forex reserves, and the latest monetary policy tightening by the US Federal Reserve too triggered the depreciation of the currency. On Wednesday, it touched a low of 81.90 against the US dollar, as against the previous day's closing at 81.70. The US central bank seeks to achieve maximum employment and inflation at the rate of 2 per cent over the long run and it anticipates that the ongoing hikes in the target range will be appropriate. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline. However, consumer inflation in the US declined marginally in August to 8.3 per cent from 8.5 per cent in July but is way above the 2 per cent goal.