Don’t see an adverse impact of Fed rate hike on India: DEA Secy

Department of Economic Affairs Secretary Ajay Seth on Thursday stated that he does not see an adverse impact of US Federal Reserve rate hike of 75 basis points on India. The Fed rate hike is the highest increase since 1994 as US aims to control inflation that has spiralled to a 40-year high.

To calm the investors and panic in the Indian bourses today, the DEA Secretary also said that all monetary authorities across the globe are taking adequate measures to control inflation.

He also mentioned that RBI has already taken adequate measures in their two meetings -- via which the central bank's Monetary Policy Committee (MPC) raised repo rate by 90 basis points to 4.90 per cent to tame inflation.

Meanwhile, Indian bourses suffered losses today as Sensex crashed over 1,000 points in afternoon trade after a brief bout of relief rally in the morning session. The market ended lower today amid weak global cues. Sensex tanked 1,045 points to 51,495 and Nifty ended 331 points lower at 15,360.

Accounting for the intraday low, Sensex has crashed 1,705 points from the high point of the day today. The index had surged to 53,142 in the morning trade. Similarly, Nifty tanked 348 points intraday to 15,344 (52-week low) against the previous close of 15,692. The index fell 519 points from the high point of the day.

On Wednesday, the US central bank had approved its biggest interest rate hike since 1994 and projected a slowing economy and rising unemployment in the months to come.

Addressing a news conference after the end of the Fed's latest two-day policy meeting, Fed Chairman Jerome Powell said, "We don't seek to put people out of work," adding that the central bank was "not trying to induce a recession."

(With inputs from Karishma Asoodani)