Rupee set to test fresh lows as Powell dispels hopes of softer Fed

But depreciation likely to be orderly because of RBI support, FPI inflows

Over the past month, speculation of the US Federal Reserve slowing down the pace of monetary tightening amid fears of a recession has been a key factor that lent support to the Indian rupee, with overseas investors returning to domestic assets.

But with Fed Chair Jerome Powell on Friday unequivocally stating the US central bank’s commitment to curbing inflation, emerging market currencies, such as the rupee, are set to feel pressure in the coming days because of a strengthening dollar.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against