US Fed Rate Hike: Markets scared by Federal Reserve raising interest rates; Know what will be its effect on India
The US Federal Reserve (US central bank) on Wednesday announced to increase interest rates by 75 basis points or 0.75 percent. This is the third time in a row that the US central bank has raised interest rates to control inflation.
Inflation remains a matter of concern all over the world these days. In America too, it has reached the highest level in 40 years. At the same time, in the commentary given by the Fed on interest rates, it has been said that interest rates can be increased to 4.6 percent in 2023 under the target of bringing inflation to 2 percent. Earlier this year it was around 0 percent.
Fed rate hike affects the whole world
Experts believe that the effect of the aggressive policy adopted by the Fed to control inflation will be seen not only in America but all over the world. Some of its effects can be seen in India as well. Let's know...
Indian stock market
The immediate effect of the increase in interest rates by the Fed can be seen in the Indian stock market. The main indices may see pressure in the coming days. This is because due to rising interest rates in the US, it will be more expensive for foreign investors to invest in India than before.
The interest rates may increase in India
The effect of increasing interest rates in the US can be visible in the meeting of the Monetary Policy Committee to be held in late September. This may put pressure on the RBI to increase the interest rate. Recently there was a report by Morgan Stanley, in which it was told that due to inflation, RBI may increase interest rates by 50 basis points or 0.50 percent.
pressure on rupee
With the Fed raising interest rates, US investors can withdraw funds from world markets and invest in their own countries. Due to the dollar index being at the highest level, along with the world's currencies, pressure can also be seen on the Indian rupee in the coming times.