Indian rupee continue to depreciate and declined to record low of 56.57
Indian rupee continue its decline trend after the Reserve Bank of India kept interest rates on hold raising worries about economic growth prospects.. Yesterday, foreign institutional investors bought Indian shares worth a net Rs 119.58 crore. Even, fII inflow in to capital market segment didn’t support the local currency. Domestic equities also remained choppy trading close to the red line. Regional share markets also fell broadly after the Federal Reserve ramped up monetary stimulus by expanding "Operation Twist", but disappointed some investors who had been hoping for more aggressive measures. Weak Asian stocks hunt sentiment adversely. Most Asian stocks dropped as the latest data showed manufacturing activity cooling further in China and after investors hoping for major new Federal Reserve stimulus were disappointed.
The US dollar continued to hold above a one-month low against a basket of major currencies even after the Federal Reserve delivered another dash of monetary stimulus and said it was ready to do more if necessary. The Fed stopped short of launching a more aggressive programme of buying bonds outright, or QE3, that came below market expectations. The central bank expanded its "Operation Twist" by $267 billion, meaning it will sell that amount of short-term securities to buy longer-term ones to keep long-term borrowing costs down. The program, which was due to expire this month, will now run through the end of the year.