Rupee drops 37 paise as Fed continues reduction of asset purchases

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Rupee drops 37 paise as Fed continues reduction of asset purchases
The rupee was weak in line with major currencies as the US Federal Reserve decided to further taper its asset purchase programme or QE3 by $10 billion.

The rupee was trading at 62.77, after having touched a low of 62.90 in early trade. The currency had closed at 62.41 on Wednesday.

Late on Wednesday the US Federal Reserve said that it would reduce its asset purchase programme by a further $10 billion to $65 billion.

Reduction in the programme is not good for emerging market currencies and stocks as it reduces liquidity. Emerging market currencies tend to be weak on hints of QE3 tapering or after the actual event. read more on QE3 here

Meanwhile, Indian markets fell sharply in line with Asian markets.

The Sensex was trading lower by 193 points, while the Nifty lost 60 points in trade.

The Japanese Nikkei saw a huge cut of 511 points or a staggering 3.31 per cent, while the Hang Sang was down 1.5 per cent in trade and the Singapore's Strait Times down 1 per cent in trade as a result of the US Fed's decision.

Read more about: dollar, qe3, federal reserve
Story first published: Thursday, January 30, 2014, 9:49 [IST]
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