Rupees, bonds gain despite 75 bps US Fed rate hike to tackle inflation

Markets perceive Fed as being less hawkish

Rupee and Indian government bonds strengthened on Thursday despite a 75-basis-point (bp) rate hike by the US Federal Reserve as key aspects of the central bank’s commentary were perceived as indicating that future policy tightening may occur at a slower pace in the world’s largest economy.

The rupee settled at 79.76 per US dollar as against 79.90 in the previous close. Strength in domestic equities also bolstered the currency, with the BSE Sensex and the NSE Nifty gaining 1.9 per cent and 1.7 per cent, respectively.

Yield on the 10-year benchmark 6.54 per cent, 2032 government bond settled at 7.33