How interest rate hikes by US Fed can affect India
A rate hike in the US will lead to a stronger dollar and a weaker rupee, which will lower investment returns for foreign investors and prompt them to sell
The US Federal Reserve held interest rates steady last week and is on track to raise rates in June, as it has expressed confidence that a recent rise in inflation to close in on its target would be sustained. In March, the Fed raised benchmark interest rates to between 1.50% and 1.75%. It currently forecasts another two increases this year, although many policymakers see three possible rate hikes.