Hailing the decision of the US Fed to overnight increase the funds rate to a target range of 0.75 percent to one percent, Chief Economic Adviser Arvind Subramanian on Thursday said that it was anticipated with a probability of 100 percent and added that this move should not be seen as a surprise.
Talking about the affect of the rate hike on the Indian market, Subramanian said there is very little volatility in the market, adding there is, however, pressure on the rupee to strengthen in the coming weeks.
"There is very little impact on India and Indian rupee in terms of capital outflows because export numbers have been good so far," added Subramanian.
The US Federal Reserve on Wednesday increased its benchmark interest rate a quarter point amid rising confidence that the economy is on the path of robust growth.
It for the second time in three months that the Fed has increased its interest rates, which is widely anticipated by the financial markets as it has taken the overnight funds rate to a target range of 0.75 percent to one percent and set the Fed on a likely path of regular hikes ahead.
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