With dollar emerging as a safe haven for global investors getting restive on fresh Eurozone worries, rupee further lost 57 paise on Wednesday closing at a new low of 56.24 despite RBI efforts to prop it up.
While the Indian foreign exchange market was following the global cues, the situation for rupee aggravated amid sustained month-end dollar demand from importers.
In the last two days, rupee has lost 106 paise. Its earlier record low was on May 23 when it closed at 56.
After opening weak, the rupee soon breached the key 56-mark as the American currency strengthened with reports saying the Bank of Spain expects the nation’s economy to sink deeper into a recession.
With the euro falling to the lowest level since July 2010 and continued dollar buying by importers to meet their month-end bills, the rupee finally closed at 56.24.
Experts said if RBI hadn’t intervened today, the rupee could have approached its record low of 56.38 hit on May 24.
“As dollar strengthened against other currencies today, it had its reflection on the rupee. However, if it was not for the central bank’s intervention today, the rupee would have fallen further,” said Moses Harding, Head— ALCO and Economic & Market Research, IndusInd Bank.
According to Abhishek Goenka, CEO, India Forex Advisors, the rupee will remain under pressure on the Eurozone issue.
On Tuesday,, Egan—Jones Ratings cut Spain’s credit level, the third downgrade from the agency in less than a month.
“The third downgrade (for Spain) from the rating agencies in less than a month has made investors cautious about any hopes that the issue will be resolved soon in Spain,” he said.
The rupee has lost over 6 per cent this month, the worst performance in Asia, driven by a combination of deteriorating global sentiment and weak domestic fundamentals.
Meanwhile, the Indian benchmark Sensex today dipped by 126.43 points or 0.77 per cent.
Andy Padman: Great thinking indeed! How about we have the rupee
depreciate and have it equivalent to 80 or 100 rupees to a US$?
Do you know that we import more than we export? I wish you did your
homework before you spew such nonsense. You need to know "economics 101"
first, before you make such comments.
Falling Rupees ? No need to worry. Good for exports and bad for imports. That's good for Indian economy. Why worry about this. China keeps their currency at low for the same reason. Falling Rupee is good for India.
Two years back, the psychological level was Rs 50, two months back it was Rs 55.00 and now it is Rs 56.00. Looks like the psychological levels are being revised too!!
I think everyone in India who is rich love rupee depreciation and acting in same direction. One who is middle class or poor doesn't understand its perils so he is also going in wrong direction and helping rupee depreciation. Use of cheaper, less subsidized and indigenous stuffs can reduce depreciation and appreciate rupee. But we are bent upon using imported, costly, subsidized and scarce resources. Look we fool Indians are enjoying subsidies of Rs 1 lac crore on imported lpg and kerosene digging the grave of Indian economy while poorest 10 crore families can be given low quality of coal in Rs 10000 crore. Many times more than this fault nobody is using infinite free infinite solar energy as heat , light and steam without converting the same in electricity and going for energy related imports of 10 lac crore and are spending 15 lac crore a year on energy and causing Rs 1000 crore a day under recoveries to government on same account. Wake up indians help our mother india or finsh.
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