Rupee recovered some of its strength from the prior week and retreated to 81.50 levels, while the dollar retreated to 105.60 levels. The FOMC meeting minutes revealed that the majority of the officials believe the central bank should limit the rate of interest rate hikes, which caused the dollar to lose strength. Additionally, the rupee was supported by a drop in crude oil prices and an increase in risk appetite on the international markets.
This week, the Indian Rupee is projected to strengthen once again, possibly reaching 81.00 levels as the dollar loses momentum. Additionally, the rupee may strengthen as a result of upbeat global market mood and a decline in crude oil prices. Due to recent US economic reports that were poorer than anticipated, the dollar is declining.
Investors’ hopes that the central bank might not need to tighten monetary policy as forcefully were fanned by disappointing US statistics. Furthermore, according to the minutes of the FOMC meeting, the majority of the officials supported a slower rate of interest rate increases and the idea of less aggressive monetary policy tightening.
Even the potential impact of swift policy tightening on financial stability and economic growth scared policymakers. The minutes of the meetings also showed that some of the officials were more concerned about the potential for going beyond with the increases. After the Fed announced a slowing in the pace of rate hikes, market sentiment rose as pressure on other significant central banks to continue rising interest rates increased.