Rupee trades flat against US dollar ahead of Fed policy decision

Mumbai: The Indian rupee was trading little changed against the US dollar ahead of the US Federal Reserve’s policy statement due later on Wednesday.

At 2pm, the home currency was trading at 65.22 a dollar, down 0.03% from its Tuesday’s close of 65.20. The rupee opened at 65.23 a dollar.

The US Fed is expected to raise interest rates on Wednesday, and thereafter likely to go for two more rate hikes this year. A rate hike by the Fed at its current meeting is more or less a certainty and is already priced in by the markets, Mint reports.

Benchmark Sensex index rose 0.63%, or 209.40 points, to 33,206.16. So far this year, it has declined 3.1%.

Finance ministry officials discussed government borrowing plan for FY19 with primary dealers. Bonds with shorter tenor will boost demand and lower mark-to-market losses, a government official told Bloomberg.

The 10-year bond yield was at 7.638% compared to its previous close of 7.618%. Bond yields and prices move in opposite directions.

So far this year, the rupee has fallen 2%, while foreign investors have bought $1.60 billion in equity and sold $310.80 million in debt market.

Asian currencies were trading lower. South Korean won was down 0.21%, Malaysian ringgit 0.17%, Taiwan dollar 0.08%, Thai baht 0.05% and Indonesian rupiah fell 0.05%. However, Singapore dollar, China offshore and Japanese yen were up 0.05% each.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 90.282, down 0.10% from its previous close of 90.371.