In the initial trade, the rupee dropped by 30 paises to 77.55 against the US dollar

In the initial trade, the rupee dropped by 30 paises to 77.55 against the US dollar

According to sources, tightening of policy rates by major central banks, including the RBI, would adversely impact demand in the next 6-8 months and slow down the recovery process. Besides the Reserve Bank of India (RBI), several central banks including the US Federal Reserve and Bank of England have hiked their benchmark lending rates to rein in inflation, which has been exacerbated by the Russia-Ukraine conflict. Foreign institutional investors remained net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,609.35 crore, as per stock exchange data.

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  • On the domestic equity market front, the 30-share Sensex was trading 822.94 points or 1.52 percent lower at 53,265.45, while the broader NSE Nifty declined 239.30 points or 1.48 percent to 15,927.80. Global oil benchmark Brent crude futures declined 1.11 percent to USD 106.32 per barrel. The Reserve Bank is likely to raise inflation projections in the Monetary Policy Committee (MPC) meeting next month and would also consider a rate hike to tame inflation which is above its comfort level, according to sources. The MPC, headed by the RBI Governor, is scheduled to meet between June 6 and June 8. It has been mandated to keep retail inflation in the range of 2-6 percent. American brokerage Morgan Stanley on Wednesday cut its India growth estimate by 30 basis points for 2022-23 and 2023-24 on global headwinds and warned that macro stability indicators like inflation are set to ”worsen” going ahead.