Rupee, bonds take a sharp knock as Fed maintains aggressive stance

The domestic currency has depreciated over 10% against the greenback so far this year

The rupee and government bonds weakened sharply on Thursday as the Federal Reserve continued to signal a policy of aggressive monetary tightening, disappointing traders who had bet on a softer tone, or a “policy pivot” from the US central bank.

The rupee settled at 82.76 per US dollar as against 82.46 per US dollar on Wednesday. So far this year, the domestic currency has depreciated 10.2 per cent versus the greenback.

Yield on the 10-year benchmark government bond rose five basis points to end the day at 7.27 per cent. Bond prices and yields move inversely.

Late on Wednesday, the