Mumbai: The rupee hit a near one-year low yesterdayand was at a striking distance of an all-time low, but dollar selling by some exporters and state-run banks helped the unit recover some ground.
The rupee closed below the key 57-mark against US dollar for the first time in a year sliding by 22 paise to 57.06, casting a shadow on the economy as imports become costlier, Current Account Deficit woes worsen and inflation risks rise. At the Interbank Foreign Exchange (Forex) market, rupee resumed higher at 56.70 on initial rise in local stocks. It, however, later turned negative on heavy dollar demand from importers, mainly oil refiners, to touch a low of 57.12. Rupee finally ended at 57.06, a fall of 22 paise.
The rupee has been falling sharply since May on concerns about the US Federal Reserve withdrawing its monetary stimulus and the Reserve Bank of India not cutting rates as much as previously anticipated. The local currency has been falling for five straight weeks, taking its losses since the start of May to 5.71 percent, to make it among the worst performing currencies in Asia during this period.Reuters
