Big decision to control inflation in America, Federal Reserve raised interest rates by 0.75%, know what will be the effect on India?

US Federal Reserve’s attack on inflation in America.

US Fed Rate Hike: Fed chairman said, the Fed may increase rates by 0.75 again in July. He also said that it is necessary for the Fed to bring inflation under control.

US Federal Reserve (US Federal Reserve) has taken a big decision to control inflation in America. US Federal Reserve on 15 June 2022 interest rates ,Fed Rate) has announced an increase of 75 basis points or 0.75 per cent. After the decision of the Fed, interest rates increased to 1.75 percent. This is the biggest increase in 28 years. The increase of 75 bps is the highest since 1994. This is being seen as a step to check rising inflation. Let us tell you that inflation in America (inflation) is at a high of 40 years. In the month of May, the inflation rate in America was 8.6 percent.

Federal Reserve Chairman Jerome Powell has hinted at further hike in interest rates. The Fed chairman said, the Fed may increase rates by 0.75 again in July. He also said that it is necessary for the Fed to bring inflation under control.

Global market boom

The US Federal Reserve has reduced its growth forecast for 2022 to 1.7 per cent from 2.8% in March. After the decisions of the Fed, there has been a boom in the global market. The Dow Jones is up nearly 300 points and the Nasdaq 2.5 per cent. There are signs of strength in Asian markets. SGX Nifty opened close to 15,850 with a gain of about 180 points.

What will be the effect on India?

Rupee will weaken Due to the increase in US Fed interest rates, the Indian currency rupee is facing a crisis. This decision of the Fed will strengthen the dollar, but it may further depreciate the rupee. Already the rupee has crossed 78. In such a situation, further decline can be seen in the rupee. On Wednesday, the rupee closed at a record low for the fourth consecutive trading session. The rupee declined by 18 paise against the dollar to close at an all-time low of 78.22 per dollar.

Gold prices will fallIf the dollar will strengthen due to the Fed’s decision, then gold will be weak. Its effect will also be seen on the Indian markets. Gold prices will fall. Gold prices will decrease. On Wednesday, the price of gold in the Delhi bullion market rose by Rs 3 to Rs 50,304 per 10 grams.

Foreign investors will withdraw money from Indian markets- Foreign investors can sell in the Indian stock market after the Fed rate hike. In such a situation, there can be a big fall in the market. Foreign investors are already pulling their investors out of the Indian markets. Foreign investors have withdrawn more than Rs 2 lakh crore from the Indian stock market.

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It will be difficult to raise funds from FDI-The hike in interest rates by the Federal Reserve will make it difficult for Indian companies to raise funds from FDI. Global investors borrow in currencies with low interest rates to invest in assets around the world.

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