The Rupee Depreciated 12 paise on Tuesday

The Rupee depreciated 12 paise to 66.48 in morning trade on Tuesday ahead of the two-day policy review by the US Federal Reserve, beginning later in the day.

The domestic currency had ended 3 paise lower at 66.36 against the greenback on Tuesday on fresh demand for the US currency from banks and importers.

According to a World Bank report, although most investors expect a smooth tightening cycle from the Fed, there is a risk of substantial hit to capital flows in case investors start expecting aggressive hikes by the Fed going forward.

The risks are compounded by the recent spikes in volatility in global financial markets and deteriorating growth prospects in developing economies," said Ayhan Kose, Director of the World Bank's Development Prospects Group.

The World Bank believes that rising US interest rates could cut capital inflows to emerging markets by as much as 45 per cent. "An abrupt change in risk appetite for emerging market assets could become contagious and affect capital flows to many countries,"

The expert expects dollar to continue to appreciate going forward, but at aslower pace.

Read More - Forex News

Browse More Articles

Tweet

Written by Unknown

We are Creative Blogger Theme Wavers which provides user friendly, effective and easy to use themes. Each support has free and providing HD support screen casting.