Rupee Gains for Second Straight Session on Fed Rate Hopes

The Indian rupee gained for a second consecutive session on Wednesday, 17 September, tracking other Asian currencies, on expectations the U.S. Federal Reserve would not move to hike interest rates at the end of its meeting later in the day.

Emerging markets were also helped by news that China’s central bank is injecting a combined 500 billion yuan ($81.35 billion) of liquidity into the country’s top banks to shore up a faltering economy.

Although the rupee had touched a one-month low on Monday, 15 September, it has fallen the least among major Asian currencies in September, indicating improved resilience against fears of a wind-down in monetary stimulus by the U.S. Fed.

The rupee has shed 0.69 percent this month, compared with falls of 0.88 to 2 percent for the Indonesian Rupiah, Korean Won, Malaysian Ringgit, Phillipine Peso and Thai Baht, according to Reuters.

"Most expectations from the Fed meet have already been discounted at current levels. We see the rupee trading between 60.90 and 61.10 in the near term," said Vishweshwara M., assistant general manager, treasury, at Karnataka Bank in Mumbai.

The partially convertible rupee ended at 60.92/93 per dollar, compared to its close of 61.0550/0650 on Tuesday, 16 September.