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However, this is still better than the depreciation seen in other currencies like the Indonesian rupiah (2.8%), South Korean won (3.7%), and Japanese yen (4.8%).
RBI interventions have helped limit the rupee’s volatility and have capped its decline.In its December meeting, the Fed lowered its benchmark rate by 25 bps but signalled slower rate cuts in 2025, with the December dot-plot showing a 50 bps rate cut, down from 100 bps in September.
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Inflation in 2025, the first year of the Trump administration, is now projected at 2.5%, up from 2.1% earlier.
Further, inflation is projected to return to the 2% target in 2027 and not 2026 as previously projected.The US yields have surged, and the dollar has strengthened following the FOMC meeting.
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