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The Indian rupee fell past 85 per dollar to a new low, declining with most Asian peers as hawkish commentary by the Federal Reserve weighed on sentiment.
The currency declined 0.1% to 85.0663 against the greenback on Thursday, adding to weak regional currencies after the US Federal Reserve dialed back expectations for rate cuts next year. Yield on India’s 10-year bond rose 3 basis points to 6.78%, while the NSE Nifty 50 index fell 0.6%.
Outflows from bonds and stocks have also exerted pressure on the currency, along with a weakness in the yuan.
The currency has seen a series of record lows leading after the country’s trade deficit expanded more-than-expected in November, reaching a record high of $37.8 billion. It has added to a slowing economic growth and puts pressure on the nation’s current account deficit.
The Reserve Bank of India this month cut the country’s growth projection for the ongoing financial year to 6.6% from 7.2% earlier, amid mounting calls for the central bank to start its rate-cutting cycle.
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