Indian rupee rises against dollar, UAE dirham after Fed’s announcement on rates

The Indian rupee recovered 10 paise to 76.22 against the US dollar (20.76 versus Emirati dirham) in opening trade on Thursday, after the US Federal Reserve's monetary policy decision.

At the Indian interbank foreign exchange, the rupee opened at 76.31, then surged higher to 76.22 against the dollar, registering a rise of 10 paise in the early deals.

On Wednesday, the rupee plunged by 44 paise to close at a 20-month low of 76.32 against the American currency.

The Indian rupee opened stronger versus the dollar, following the US currency's retreat after the Federal Reserve signalled multiple interest rate increases next year, Reliance Securities said in a research note.

The Federal Reserve on Wednesday said it would end its pandemic era bond purchases in March and pave the way for 3 quarter-percentage-point interest rate hikes by the end of 2022, it added.

The appreciation bias in the rupee might be curtailed, amid growing concerns over the Omicron variant of coronavirus, firm crude oil prices and persistent foreign fund outflows, forex traders said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.09 per cent to 96.42.

On the Indian equity market front, the 30-share Sensex was trading 163.04 points or 0.28 per cent higher at 57,951.07, while the broader NSE Nifty jumped 40.10 points or 0.23 per cent to 17,261.50.

(with inputs from PTI)

• Dubai