Indian rupee decreases 0.3 percent and reaches 79.69 in the wake of oil firms absorb dollars

The rupee ended a four-day win streak Wednesday, after more than expected hot US consumer inflation numbers earlier this week increased the chances of a 3rd large rate hike from the Fed in the coming weeks.

The Indian rupee fell on Thursday as a result of the booming interest in the U.S. dollar from oil companies, as markets waited for a massive rate hike coming from the U.S. Federal Reserve next week.

It was partially convertible and ended down 0.3 percent at 79.6975 per dollar. It has dropped to 79.7250 in the course of the session.

The market is not expecting any action until the 79.90 levels. So it is based on that petroleum companies have entered the market to buy dollars, according to a foreign exchange broker at the private bank said.

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There was a decrease in flow in the market when relative to the last few sessions, according to the dealer.

The rupee ended a four-day win streak Wednesday following warmer-than-expected U.S. consumer inflation data this week have boosted bets on a third big rate increase by the Fed in the coming week.

The rupee is in the midst of pressure due to a 75 basis point rate increase by the Fed is most likely, while the Fed is likely to announce an hawkish signal at its next policy session according to a different trader from the Mumbai-based bank said.

The dollar index held its position and even moved closer to the 110 mark.

Meanwhile, Indian equities reversed course to decline 0.4%. The inflows into the markets in the month of September have not kept pace with the growth of August.

Foreign investors sold net local shares that were worth 13.9 billion Indian rupees ($174.43 million) on Wednesday, preliminary data from the Indian government indicated, following being net sellers in the amount of $1.2 billion in stock during the month of March through Tuesday.

On the other hand the rates on the 10-year benchmark bond jumped eight basis points, to 7.2386%, the largest increase in just six weeks.

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