Mumbai : Taking the US Fed rate hike as a sign of the growing confidence in the American economy, the benchmark Sensex climbed for the fourth stra-ight day, closing 309 points up at 25,803.78 — its biggest single-day gain in about a month. The US Federal Reserve has hiked rates for the first time in nearly a decade.
At 66.42, the rupee also closed on a firm note against the dollar, which kept the mood upbeat. According to India Ratings, the rupee will stabilise between 66.30-66.60 per dollar during the week. Traders expect the RBI to actively intervene in rupee markets to prevent excessive volatility and to buy debt, including via open market operations. Reserve Bank of India chief Raghuram Rajan has said previously India would be prepared for any Fed eventuality, with foreign exchange reserves of $352 billion at hand.
In the run-up to the Fed hike, foreign investors have aggressively pulled money out of India, but things may calm down now, experts say. The impact of the US interest rate hike should be minimal in India as the country is relatively well cushioned, Chief Economic Adviser Arvind Subramanian said on Thursday. Economic Affairs Secretary Shaktikanta Das said US Fed rate hike was on expected lines and India is well prepared to deal with it. The Fed’s confidence in the US economy is good news for India’s exports and Indian IT sector, he added. Input NDTV