US dollar saw a sharp decline on Wednesday following the rate hike by the Federal Reserve which raised its benchmark interest rate for the second time in three months.
The institution also signaled that further hikes this year will be gradual and the interest rates will reflect and affect some consumer and business loans.
The rate interest hike has risen by a quarter-point to a still-low range of 0.75 percent to 1 percent.
In their statement, the Central bank said that a strengthening job market and rising prices had moved it closer to its targets for employment and inflation.
The hike also conveys that the economy now no longer needs the support of ultra-low borrowing rates and is healthy enough to withstand steadily tighter credit.
The decision, issued after the Fed's latest policy meeting ended, was approved 9-1. The one dissenting vote was of Neel Kashkari, president of the Fed's regional bank in Minneapolis. The statement said that Kashkari preferred to leave rates unchanged .
The hike will not affect the Indian economy alone but World over all the economies will be affected. Only the degree will differ depending on the individual economies.