Meanwhile, the US Federal Reserve (Fed) raised interest rates recently as the prices of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high in the country and offering US households little respite.
The Chinese yuan and the Japanese yen, along with other major currencies, have all weakened against the US dollar. However, India is relatively more vulnerable as it depends on imports to meet about 85 per cent of its oil requirements.
The Reserve Bank of India’s forex reserves fell below $600 billion in the week ended April 29, data from the central bank showed.
Consumer prices in the United States surged by 8.6 per cent in May from a year earlier, faster than April's year-over-year (YoY) increase of 8.3 per cent, the labour department said.
The new inflation figure, the highest since 1981, will heighten pressure on the Fed to continue aggressively raising interest rates.
Gas prices in the United States rose by 4 per cent in May and have soared by nearly 50 per cent in a year. Rampant inflation is imposing severe pressures on US families, a global newswire reported.
The Fed has signaled that it will raise its key short-term rate by a half-point—double the size of the usual hike—next week and again in July.
Surveys show that Americans see high inflation as the nation's top problem, and most disapprove of President Joe Biden's handling of the economy.
ALCHEMPro News Desk (DS)
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