The dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point, citing greater confidence that inflation will continue to recede to the U.S. central bank's 2% annual target.

The effect of a declining dollar is likely to be subdued, said economist Eswar Prasad, since other nations are seeing weak economic growth.

This has been corrected to reflect that the Fed moved to cut rates twice by 50 basis points and 100 basis points in March 2020. The U.S. dollar has been sliding in the run-up to a widely expected interest-rate cut from the Federal Reserve on Wednesday and,